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NZD/USD Forex Technical Analysis – Bearish Under .6655, Bullish Over .6689; Choppy in Between

By:
James Hyerczyk
Published: Nov 4, 2020, 03:07 UTC

The direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to the short-term 50% level at .6655.

NZD/USD

The New Zealand Dollar is dropping hard early Wednesday after hitting its highest level since September 21 earlier in the session. The move is taking place as the U.S. Dollar clawed back early losses against risk-sensitive currencies after preliminary results suggested President Donald Trump has a slight edge over Democratic challenger Joe Biden in Florida, a key battleground state.

At 02:34 GMT, the NZD/USD is trading .6635, down 0.0066 or -0.98%.

Earlier in the session, the NZD/USD spiked higher after Statistics New Zealand reported the jobless rate in New Zealand came in at a seasonally adjusted 5.3 percent in the third quarter of 2020. That beat expectations for 5.4 percent, although it was still up sharply from 4.0 percent in the three months prior – representing the biggest quarterly increase on record.

The employment change was -0.8 percent, matching expectations following the 0.4 percent decline in the previous three months.

The Labor Cost Index rose 0.4%, beating the 0.2% estimate.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed early in the session when buyers took out the previous main top at .6724, but the rally stalled at .6743, triggering a plunge into .6614.

The main trend will change to down on a trade through .6589.

The short-term range is .6798 to .6512. Its retracement zone at .6655 to .6689 is potential resistance. This area will likely control the direction of the NZD/USD on Wednesday.

The minor range is .6512 to .6743. Its retracement zone at .6627 to .6600 is support. Prices could plunge if this area fails to hold.

Daily Swing Chart Technical Forecast

Given the early volatile trade, the direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to the short-term 50% level at .6655.

Bearish Scenario

A sustained move under .6655 will indicate the presence of sellers. This could trigger a break into the minor 50% level at .6627, followed by the Fibonacci level at .6600.

Taking out .6600 will be a bearish sign. This could trigger the start of an acceleration to the downside.

Bullish Scenario

A sustained move over .6655 will signal the presence of buyers. This could trigger a surge into the short-term Fibonacci level at .6689. This is a potential trigger point for an acceleration to the upside.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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