NZD/USD Forex Technical Analysis – .7087 Pivot Controlling Direction
The New Zealand Dollar is edging higher early Tuesday on light holiday volume. The market is being supported by strong risk sentiment with most global equity markets trading at or near their highs of the year.
The Kiwi is getting a boost from a weaker U.S. Dollar. The greenback is being pressured by hopes for a new stimulus package in the United States and optimism over the rollout of vaccines in the Unites States and Europe.
At 07:34 GMT, the NZD/USD is trading .7127, up 0.0024 or +0.34%.
In the U.S., the House of Representatives voted on Monday to increase stimulus payments to qualified Americans to $2,000 from $600, sending the measure on to the Senate for a vote. Most traders don’t expect the bill to get past the Republican-led Senate, but if it did, it would be an extremely bullish surprise.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The trend turned down on December 21 when sellers took out the swing bottom at .7054. However, the lack of follow-through to the downside suggests the move may have been an aberration triggered by sell stops rather than major shorting pressure.
A trade through .7171 will change the main trend to up, while a move through .7003 will signal a resumption of the downtrend.
The minor range is .7171 to .7003. The NZD/USD is currently trading on the strong side of its pivot at .7087. This level is now support.
Daily Swing Chart Technical Forecast
The early price action suggests the direction of the NZD/USD on Tuesday will be determined by trader reaction to the pivot at .7087.
A sustained move over .7087 will indicate the presence of buyers with the next upside target the main top at .7171.
A sustained move under .7087 will signal the presence of sellers. If this move creates enough downside momentum, we could see an eventual test of the minor bottom at .7003.
We’re expecting another low volume trade with a bias to the upside as long as the NZD/USD can hold above .7087.
For a look at all of today’s economic events, check out our economic calendar.