NZD/USD Forex Technical Analysis – Bulls Facing Resistance at .6319 – .6379 Retracement Zone

The New Zealand Dollar is trading flat on Monday on light volume likely due to a bank holiday in New Zealand. Traders are also sitting on the sidelines ahead of Tuesday Reserve Bank of Australia (RBA) interest rate decision that could set the tone in the region.

At 06:33 GMT, the NZD/USD is trading .6294, up 0.0002 or +0.03%.

Economic data could also play a role in determining today’s price action. Earlier in the session a domestic release showed a slip in New Zealand building permits. Later today at 14:00 GMT, the U.S. will release a key report on ISM Manufacturing PMI.

RBNZ Rate Hikes Weigh on NZ Building Permits

The total number of building permits issued in New Zealand was down a seasonally adjusted 2.3 percent on month in June, Statistics New Zealand said on Monday – coming in at 4,037. That follows the 0.5 percent monthly decline in May.

On a yearly basis, the number of new dwellings consented was 50,736, up 14 percent from the year ended June 2021.

The report suggests the Reserve Bank of New Zealand’s series of rate hikes is weighing on real estate.

US Manufacturing PMI on Tap

Today’s U.S. Manufacturing PMI report is expected to show a dip from 53.0 to 52.3. A report that shows activity slowed more than expected in July will serve as another sign that the economy was cooling amid aggressive monetary policy tightening by the Federal Reserve.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through .6396 will change the main trend to up. A move through .6061 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through the minor bottom at .6192 will change the minor trend to down.

The short-term range is .6576 to .6061. Its retracement zone at .6318 to .6379 is resistance. It stopped the buying on Friday at .6329.

On the downside, the key support is the long-term Fibonacci level at .6231, followed by the minor pivot at .6195.

Daily Swing Chart Technical Forecast

Trader reaction to .6274 will determine the direction of the NZD/USD on Monday.

Bullish Scenario

A sustained move over .6274 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into .6319 – .6329. Overtaking this level could trigger a move into the Fibonacci level at .6379, followed by the main top at .6396. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .6273 will signal the presence of sellers. If this generates enough downside momentum then look for a pullback into the major support at .6231. This Fibonacci level is controlling the longer-term direction of the NZD/USD.