NZD/USD Forex Technical Analysis – August 6, 2019 ForecastBased on the early price action and the current price at .6544, the direction of the NZD/USD the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at .6551.
The New Zealand Dollar is trading higher on Tuesday, but pulling back from its high hit earlier in the session, following the release of stronger-than-expected employment numbers. Despite the solid data, traders don’t think the news will prevent the Reserve Bank of New Zealand from cutting its official cash rate on Wednesday.
At 07:50 GMT, the NZD/USD is trading .6544, up 0.0014 or +0.22%.
The report showed the jobless rate fell to 3.9 percent in the June quarter. That was down from 4.2 percent in the March quarter and well below economists’ expectations of a lift to 4.3 percent.
The strong jobs numbers justified the Kiwi’s bounce, but any strength is likely to be short-lived because of the escalating tensions between the United States and China. Furthermore, the RBNZ is widely expected to cut its benchmark interest rate 25-basis points tomorrow.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6488 will signal a resumption of the downtrend. A move through .6487 will reaffirm the downtrend. This is followed closely by another main bottom at .6481 and the October 16, 2018 main bottom at .6465.
The minor trend is also down. Today’s early strength helped turn .6488 into a minor bottom.
The short-term range is .6791 to .6488. Its retracement zone at .6640 to .6675 is the nearest upside retracement target.
Daily Technical Forecast
Based on the early price action and the current price at .6544, the direction of the NZD/USD the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at .6551.
A sustained move under .6551 will indicate the return of sellers. This is followed by a short-term 50% level at .6538. Counter-trend buyers could come in on a test of this pivot. If it fails then look for the selling to possibly extend into the minor bottom at .6488. This is followed by .6487, .6481 and .6465.
A sustained move over .6551 will signal the presence of buyers. They may attempt to drive the NZD/USD into the intraday high at .6588. It’s a long shot, but a sustained move over .6588 could lead to an eventual test of the short-term 50% level at .6640.
We’re just seeing a reaction to the jobs report early in the session. Putting a cap on the rally are U.S.-China concerns. Traders are also positioning themselves ahead of the RBNZ interest rate decision.