NZD/USD Forex Technical Analysis – August 12, 2019 Forecast

Based on the early price action, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the downtrending Gann angle at .6471. This angle, moving down at a rate of 0.002 per day from the .6791 top has been guiding the Forex pair lower since July 19.
James Hyerczyk
NZD/USD

The New Zealand Dollar is inching lower early Monday, but for a third straight session, we’re looking at a pretty tight range following the surprise 50-basis point rate cut by the Reserve Bank (RBNZ) on August 7. Traders were looking for a 25-basis point rate cut by policymakers.

Yes, there was a steep drop after the announcement, but the charts indicate that the move was fueled by sell stops rather than aggressive new shorting. The way I see it, the trigger point for the steep break were stops placed under the May 23 bottom at .6481. Within a day of plunging to .6378, the NZD/USD was already trading back above .6481. This could mean that short-sellers under .6481 were caught in a bear trap. If they are still short then we could see a big short-covering rally if they get squeezed.

Furthermore, some analysts made it sound like the RBNZ unexpectedly cut 50-basis points. This is not true, per se. The central bank was widely expected to cut rates 25-basis points so the surprise was actually an additional 25-basis points. And you can see on the chart that traders may have already absorbed that.

At 07:50 GMT, the NZD/USD is trading .6459, down 0.0008 or -0.11%.

Daily NZD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6378 will signal a resumption of the downtrend. The main trend will change to up when buyers take out .6791. This is highly unlikely today.

The minor trend is also down. The minor trend will change to up on a trade through .6588. This will also shift momentum to the upside.

The short-term range is .6791 to .6378. Its retracement zone at .6585 to .6633 is the next upside target and potential resistance.

Daily Technical Forecast

Based on the early price action, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the downtrending Gann angle at .6471. This angle, moving down at a rate of 0.002 per day from the .6791 top has been guiding the Forex pair lower since July 19.

Bearish Scenario

A sustained move under .6471 will indicate the presence of sellers. If this move creates enough downside momentum then we could see an eventual retest of last week’s low at .6378. If this level fails then look for a test of the January 20, 2016 main bottom at .6346. This is a potential trigger point for an even steep break with the August 24, 2015 main bottom at .6207 the next potential target level.

Bullish Scenario

A sustained move over .6471 will signal the presence of buyers. The next targets are the former bottom at .6481 and a minor high at .6499.

Taking out .6499 could trigger an acceleration to the upside since the daily chart indicates there is room to run with the next targets coming in at .6585 and .6588.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US