James Hyerczyk
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The New Zealand Dollar is trading slightly higher late in the session on Friday after giving back most of its earlier gains. The Kiwi began its retreat after a jump in 10-year U.S. Treasury yields. The currency rose earlier in the session to its highest level in more than a week after the Commerce Department reported core personal consumption expenditures price index rose 3.4% in May from a year earlier, as expected.

At 18:13 GMT, the NZD/USD is trading .7063, up 0.0003 or +0.04%.

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The U.S. Dollar was also pressured early in the U.S. session after data showed that U.S. consumer spending was flat in May. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, held steady following an upwardly revised 0.9% jump in April. Economists polled by Reuters had forecast consumer spending rising 0.4%.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7316 will change the main trend to up. A move through .6923 will signal a resumption of the downtrend.

The minor trend is also down. A trade through .7243 will change the minor trend to up. This will also shift momentum to the upside.

The main support is a retracement zone at .7027 to .6924. This zone stopped the recent sell-off.

On the upside, the first 50% resistance level at .7083 helped stop the rally earlier in the session. The short-term range is .7316 to .6923. Its retracement zone at .7120 to .7166 is the next potential resistance area.


Daily Swing Chart Technical Forecast

The direction of the NZD/USD into the close will be determined by trader reaction to .7083.

Bearish Scenario

A sustained move under .7083 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into .7027 to .7009.

Bullish Scenario

A sustained move over .7083 will signal the presence of buyers. The first upside target is the intraday high at .7095, followed by .7120 to .7166.

Side Notes

It looks as if the NZD/USD is forming a potentially bearish secondary lower top. This could lead to a test of the minor pivot at .7009. This move will be critical to the structure of the chart pattern. Aggressive counter-trend buyers are likely to come in on a test of this level. They are going to try to form a secondary higher bottom. Sellers are going to try to take out .7009 in the hopes it leads to a confirmation of the down trend.

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