NZD/USD Forex Technical Analysis – Grinding Higher as Charts Show Little Resistance Until .6791

The New Zealand Dollar continues to grind higher on the strong side of a long-term retracement zone early Thursday. The catalysts underpinning prices are last week’s stronger-than-expected GDP report and low expectations for an interest rate cut by the Reserve Bank of New Zealand at its policy meeting on January 14 -16.

At 07:33 GMT, the NZD/USD is trading .6650, up 0.0019 or +0.29%.

Optimism over the recently announced U.S.-China trade agreement is also supporting prices. President Donald Trump said Tuesday the trade deal with China is getting done, adding there will be a signing ceremony with Chinese leader Xi Jinping.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The market is currently nudging higher, just above last week’s high at .6636. The main trend will change to down on a trade through .6554.

I don’t expect to see a change in trend over the near-term, however, due to the thin trading conditions, we could see a short-term reversal that could alleviate some of the upside pressure.

The main range is .6791 to .6204. Its retracement zone at .6567 to .6497 is support. Holding above the upper or Fibonacci level of this range is helping to generate some of the upside bias.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the NZD/USD on Thursday is likely to be determined by trader reaction to Wednesday’s close at .6631.

Bullish Scenario

A sustained move over .6631 will indicate the presence of buyers. The NZD/USD could continue to edge higher over the near-term since the next major upside target is the July 19 top at .6791. If there is bullish news over the short-run, the Forex pair could even accelerate to the upside.

Bearish Scenario

A sustained move under .6631 will signal the presence of sellers. This will put the NZD/USD in a position to post a closing price reversal top. This could trigger the start of a 2 to 3 day correction. The move won’t change the trend to down, but it could alleviate some of the excessive upside pressure.