The direction of the NZD/USD on Thursday is likely to be determined by trader reaction to .6802.
The New Zealand Dollar is inching higher early Thursday, following a solid performance the previous session. The catalysts underpinning the Kiwi are improving global risk sentiment as investors banked on Omicron being “mild”, while a surge in the Chinese Yuan provided an extra tailwind.
At 06:03 GMT, the NZD/USD is trading .6816, up 0.0009 or +0.13%.
In economic news, New Zealand manufacturing sales volumes fell 6.4 percent in the third quarter, data from Statistics New Zealand show on Thursday. Volumes for dairy and meat products, the country’s biggest export earners, fell 1.1 percent.
The main trend is down according to the daily swing chart, however, momentum has been trending higher since the confirmation of Tuesday’s closing price reversal bottom.
A trade through .6868 will change the main trend to up. A move through .6737 will negate the closing price reversal bottom and signal a resumption of the downtrend.
The minor range is .6868 to .6737. The NZD/USD is currently trading on the strong side of its pivot at .6802, making it early support.
The second minor range is .7053 to .6737. If the main trend changes to up then its pivot at .6895 will become the next target.
The short-term range is .7219 to .6737. Its retracement zone at .6978 to .7035 is the primary upside target.
The direction of the NZD/USD on Thursday is likely to be determined by trader reaction to .6802.
A sustained move over .6803 will indicate the presence of buyers. If this move creates enough upside momentum then look for the short-covering to possibly extend into the main top at .6868.
Taking out .6868 will change the main trend to up. This could trigger a quick move into .6895.
A sustained move under .6802 will signal the presence of sellers. This could trigger a break into .6778. Counter-trend buyers could come in on the first test of this level. They are going to try to form a potentially bullish secondary higher bottom.
If .6778 fails then look for the selling to possibly extend into .6737.
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.