NZD/USD Forex Technical Analysis – April 16, 2019 Forecast

The New Zealand Dollar is trading lower on Tuesday, following a similar move in the Australian Dollar after the RBA released the minutes from its last policy meeting, which were construed as dovish. The minutes showed that policymakers discussed interest-rate cuts and concluded there was “not a strong case” for an adjustment in the near term. This decision was in contrast to the Reserve Bank of New Zealand (RBNZ), who said in March that its next move would be a rate cut.

At 04:25 GMT, the NZD/USD is trading .6756, down 0.0007 or -0.10%.

Although optimism over a U.S.-China trade deal has been helping to prop up the Kiwi, prices still weakened ahead of a domestic consumer inflation report on Wednesday. Economists expect quarterly CPI to have risen 0.3 percent, for an annual increase of 1.7 percent. That compares to the Reserve Bank’s quarterly projection of 0.2 percent for an annual rise of 1.6 percent.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum shifted higher last Friday although there has been very little follow-through to the upside.

A trade through .6713 will negate a closing price reversal bottom that led to the shift in momentum. It will also signal the resumption of the downtrend. The next major target bottom is .6706.

The minor trend is up. This, along with the confirmation of the closing price reversal bottom, shifted momentum to the upside. A trade through .6713 will change the minor trend to down and shift momentum back to the downside.

The main range is .6970 to .6591. Its retracement zone at .6781 to .6852 is resistance. It is also controlling the longer-term direction of the NZD/USD.

The short-term range is .6591 to .6943. The NZD/USD is currently trading inside its retracement zone at .6767 to .6725. This zone, acting like support, is preventing an acceleration to the downside.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6756, the direction of the NZD/USD on Tuesday will be determined by trader reaction to the 50% level at .6767.

Bullish Scenario

A sustained move over .6767 will indicate the presence of buyers. This could trigger a rally into another 50% level at .6781. Taking out Monday’s high at .6784 could trigger an acceleration to the upside with the Fibonacci level at .6825 the next major target.

Bearish Scenario

A sustained move under .6767 will signal the presence of sellers. If this move creates enough downside momentum then look for an extension of the break into the Fibonacci level at .6725. This is followed by a pair of main bottoms at .6713 and .6706.

Look out to the downside if .6706 fails as support. The next major target is the January 3 bottom at .6591.