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NZD/USD Forex Technical Analysis – Formed Potentially Bullish Closing Price Reversal Bottom

By:
James Hyerczyk
Published: Nov 27, 2018, 22:45 UTC

The direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to .6811. Taking out this level will confirm the closing price reversal bottom.

New Zealand Dollars

The New Zealand Dollar posted a potentially bullish closing price reversal bottom on Tuesday helped by comments from a high-ranking U.S. Federal Reserve official, weaker-than-expected U.S. economic data and optimism that the U.S. and China would make some progress towards ending the on-going trade dispute between the two economic powerhouses.

The NZD/USD settled at .6793, up 0.0022 or +0.33%.

NZDUSD
Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6885 will signal a resumption of the uptrend. The main trend will change to down on a move through .6465. So we can conclude that the main trend is safe at this time.

The minor trend is also up. A trade through .6705 will change the minor trend to down. Another minor bottom comes in at .6632.

Following a prolonged move down in terms of price and time, the NZD/USD posted a lower-low, higher-close on Tuesday. If confirmed, this chart pattern can trigger the start of a 2 to 3 day rally. A trade through .6811 will confirm the closing price reversal bottom chart pattern.

A major range is .7061 to .6424. The NZD/USD is currently trading inside its retracement zone at .6742 to .6818. This zone is controlling the near-term direction of the Forex pair.

The next major range is .6851 to .6424. Its retracement zone at .6688 to .6637 is the support zone.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to .6811. Taking out this level will confirm the closing price reversal bottom.

Bullish Scenario

A sustained move over .6811 will signal the presence of buyers. This is followed closely by the major Fibonacci level at .6818. This is a potential trigger point for an acceleration to the upside with .6885 the next major upside target.

Bearish Scenario

The inability to overcome or sustain a rally over .6885 will be a sign of weakness. In other words, if buyers can’t confirm the reversal bottom then the signal was weak. This chart pattern works best when there is strong buying volume behind it.

If the selling becomes strong enough then look for a possible re-test of yesterday’s low at .6753. A trade through this level will negate the closing price reversal bottom chart pattern.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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