NZD/USD Forex Technical Analysis – Downtrend Reaffirmed After Sellers Took Out Pair of Main Bottoms

The New Zealand Dollar is down sharply early Tuesday as investors bet measures to cool its red-hot housing market will lessen the likelihood of rate hikes. The heavy selling pressure also drove the Kiwi into its lowest level since December 23, 2020.

At 06:15 GMT, the NZD/USD is trading .7072, down 0.0088 or -1.23%.

New Zealand on Tuesday introduced a raft of measures to cool its housing market, slugging investors with higher taxes and promising to boost supply, which should take off some of the pressure on the central bank to hike rates, strategists said.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed when sellers took out a pair of main bottoms at .7099 and .7096. A trade through .7270 will change the main trend to up.

The main range is .7003 to .7465. Its retracement zone at .7180 to .7234 is resistance. This area is also controlling the near-term direction of the Forex pair.

Daily Swing Chart Technical Forecast

The downside momentum is controlling the price action. Recapturing the old bottom at .7096 will be the first sign of a shift in momentum back to up.

Bearish Scenario

A sustained move under .7096 will indicate the presence of sellers. If the downside momentum leads to an acceleration to the downside then look for a possible test of the December 21, 2020 main bottom at .7003.

Bullish Scenario

Recapturing .7096 will indicate the downside pressure is lightening up. This could trigger an intraday short-covering rally into .7170 to .7180.

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