NZD/USD Forex Technical Analysis – Early Strength Over .6982, Weakness Under .6963
The New Zealand Dollar inched higher on Friday, bolstered by demand for risky assets and a late-session break by the U.S. Dollar. Traders, who are holding out hope for a 25 basis point rate hike by the Reserve Bank (RBNZ) in August are proving the support. However, gains are likely being capped by those betting the new surge in coronavirus, coupled with fresh restrictions and lockdowns, will encourage policymakers to curtail any plans for a rate hike at the August RBNZ meeting.
On Friday, the NZD/USD settled at .6978, up 0.0003 or +0.05%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6881 will signal a resumption of the downtrend. The main trend will change to up on a move through .7045.
The minor range is .7045 to .6881. On Friday, the NZD/USD straddled its retracement zone at .6963 to .6982 before settling inside the zone.
The NZD/USD is also trading inside a long-term retracement zone at .7027 to .6924.
Daily Swing Chart Technical Forecast
Based on Friday’s trade, the direction of the NZD/USD early Monday is likely to be determined by trader reaction to the short-term Fibonacci level at .6982.
A sustained move over .6982 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the long-term 50% level at .7027, followed by the main top at .7045.
A sustained move under .6982 will signal the presence of sellers. The first downside target is the minor 50% level at .6963. If this level fails as support then look for the selling to possibly extend into the main Fibonacci level at .6924.