NZD/USD Forex Technical Analysis – Holding Above .6074 Will Continue to Generate Upside Momentum

The New Zealand Dollar is inching lower late in the session on Friday on well-below average volume. The range is tight and the market has given up its earlier gains. The volume is light because U.S. and New Zealand banks are closed for Good Friday.

Despite the slight setback, the Kiwi remains underpinned by the hope of the slowing in new infections of the COVID-19 virus. The latest figures for New Zealand showed a tapering of infection rates. This news is helping to drive up demand for riskier currencies while pressuring demand for the greenback.

At 19:18 GMT, the NZD/USD is trading .6076, down 0.0004 or -0.07%.

Also weighing on the U.S. Dollar is the Fed’s new move to provide another $2.3 trillion in monetary stimulus. This time, the effort is being earmarked for local governments and small and mid-sized businesses.

In other news, earlier today, the U.S. Labor Department reported that consumer prices fell 0.4% in March, the largest monthly decline in five years, as Americans stopped traveling and the cost of gasoline, airfares and hotel rooms plummeted.

Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Thursday when buyers took out the previous main top at .6070. The next major upside target is the March 9 main top at .6448.

The main trend will change to down when sellers take out the April 3 main bottom at .5844.

The main range is .6448 to .5469. Its retracement zone at .6074 to .5958 is new support. Holding above this zone will also help generate an upside bias.

Short-term Outlook

The NZD/USD could start to expand to the upside if buyers come in to defend the retracement zone at .6074 to .5958.

A sustained move over .6074 will indicate the presence of buyers. Overtaking an uptrending Gann angle at .6109 will indicate the buying is getting stronger. If this creates enough upside momentum then look for the rally to possibly extend into a pair of downtrending Gann angles currently at .6208 and .6328. These are the last potential resistance angles before the .6448 main top.

On the downside, the first sign of weakness will be a break under the Fibonacci level at .6074. If this creates enough downside momentum then look for an eventual break into the 50% level at .5958.

A failure to hold .5958 will indicate a dramatic shift in the trend.