NZD/USD Forex Technical Analysis – Buyers May Try to Form Secondary Higher Bottom at .6600 to .6576

The NZD/USD finished slightly better on Friday with the move likely attributed to profit-taking and position-squaring after a steep sell-off throughout the week and ahead of the weekend. Despite the bearish fundamentals, the Forex pair is in a positon to test a key support area that should determine the next major move.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on September 21. A trade through .6700 will negate the closing price and signal a resumption of the uptrend. The main trend will change to down on a trade through .6500.

The minor trend is down. This move confirms the shift in momentum to down.

The main range is .6851 to .6500. Its retracement zone at .6676 to .6717 is resistance. This zone stopped the rally at .6700.

The short-term range is .6500 to .6700. Its retracement zone at .6600 to .6576 is the primary downside target. The 50% or upper level at .6600 provided support on Friday.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at .6619, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the 50% level at .6600.

Bullish Scenario

A sustained move over .6600 will indicate the presence of buyers. This could trigger a rally into .6649. Watch for sellers on the first test of this level. Overcoming it could trigger a further rally into .6676.

Bearish Scenario

A sustained move under .6600 will signal the presence of sellers. This could trigger a quick break into .6576. If this fails then look for the selling pressure to increase. The daily chart opens up under this Fibonacci level with targets at .6538 and .6500.

Buyers are going to try to form a secondary higher bottom at .6600 to .6576. Sellers are going to try to take out this zone.