NZD/USD Forex Technical Analysis – .7395 Next Upside Target; Close Below .7344 Forms Reversal TopThe direction of the NZD/USD on Wednesday is being controlled by .7344.
The New Zealand Dollar is trading higher on Wednesday after hitting its highest level since April 2018 after the Reserve Bank of New Zealand (RBNZ) emphasized patience over the timing of exiting ultra-easy policy settings.
At 06:41 GMT, the NZD/USD is trading .7371, up 0.0027 or +0.37%.
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The Kiwi rose as high as .7384, following a knee-jerk dip, after the RBNZ left its benchmark interest rate at 0.25% then expressed some caution about the outlook, potentially disappointing traders who expected the monetary authority to acknowledge a recent improvement in economic data.
“Financial markets have been flirting with the idea that the RBNZ could tighten monetary policy next year, and today’s statement will have discouraged those holding that view,” Westpac analyst Dominick Stephens wrote in a client note.
“The RBNZ wants to see the whites of the eyes of inflation and employment before it shifts monetary policy.”
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend resumed when buyers took out yesterday’s high. A trade through .7395 will reaffirm the uptrend with .7437 the next likely upside target price.
The main trend will change to down on a move through .7158. This is highly unlikely but price and time have put the Kiwi in a position to post a potentially bearish closing price reversal top.
The minor range is .7158 to .7384. Its 50% level at .7271 is the nearest support.
Daily Swing Chart Technical Forecast
The direction of the NZD/USD on Wednesday is being controlled by .7344.
A sustained move over .7344 will indicate the presence of buyers. The first upside target is the April 13 2018 main top at .7395. Taking out this level could create the upside momentum needed to challenge the February 16, 2018 main top at .7437.
A sustained move under .7344 will signal the presence of sellers. If this creates enough downside momentum then look for sellers to make a move toward the minor pivot at .7271.
Closing Price Reversal Top
A close under .7344 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction with .7271 the next potential downside target.
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