NZD/USD Forex Technical Analysis – Friday’s Late Session Recovery Could Fuel Follow-Through RallyThe early direction of the NZD/USD on Monday is likely to be determined by trader reaction to .7180.
The New Zealand Dollar fell to its lowest level against the U.S. Dollar since January 18 on Friday after a U.S. government report showed a bigger-than-expected jump in non-farm payrolls. The steep break was a continuation of the selling pressure triggered on Thursday by remarks from Federal Reserve Chair Jerome Powell.
Despite losing ground shortly after the release of the jobs report, the Kiwi finished off its low as a rebound in U.S. equity markets signaled renewed demand for riskier assets. This could lead to a follow-through rally next week as investors begin positioning themselves ahead of the Fed’s March 17 policy announcements.
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
On Friday, the NZD/USD settled at .7163, down 0.0024 or -0.33%.
Rising Treasury yields continue to exert upward pressure on the U.S. Dollar. However, rates fell sharply throughout the session on Friday, giving the New Zealand Dollar a late session boost. If this move continues on Monday, look for the Kiwi to retrace some of last week’s losses.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. The trend turned down when sellers took out .7158. It was reaffirmed when the main bottoms at .7136 and .7106 were penetrated. The selling pressure stopped just above the January 18 main bottom at .7096.
The main trend will change to up on a move through .7465. This is highly unlikely, but there is room for a short-term correction or the formation of a closing price reversal bottom.
The minor trend is also down. A trade through .7307 will change the minor trend to up. This will also shift momentum to the upside.
The main range is .7003 to .7465. The NZD/USD is currently trading on the weak side of its retracement zone at .7180 to .7234. This area is now potential resistance.
The minor range is .7465 to .7099. Its retracement zone at .7282 to .7325 is a new potential upside target zone.
Daily Swing Chart Technical Forecast
The early direction of the NZD/USD on Monday is likely to be determined by trader reaction to .7180.
A sustained move under .7179 will indicate the presence of sellers. If this move creates enough downside momentum then look for a potential break into .7099 to .7096.
A sustained move over .7180 will signal the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into .7234. Sellers could come in on the first test of this level. Overtaking it, however, could trigger a further rally into at least .7282.