NZD/USD Forex Technical Analysis – Holding Above .6264 Could Trigger Near-Term Rally into .6340

The New Zealand Dollar is trading higher early Tuesday, pulled up by a surge in the Australian Dollar after the Reserve Bank of Australia (RBA) cut its cash rate in response to the coronavirus. The kiwi was also boosted against the U.S. Dollar in response to increasing bets on a Fed rate cut later this month.

At 05:05 GMT, the NZD/USD is trading .6266, up 0.0005 or +0.08%.

After hitting a multi-year low on Friday, the NZD/USD has rebounded slightly, prompted by dovish comments from U.S. Federal Reserve Chairman Jerome Powell. He said the Fed would “act as appropriate” to support the economy.

Investors took his comments as a hint that the Fed will deliver a cut when it meets March 17-18. Fed Fund futures prices are implying a 50 basis point cut at that time.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6192 will signal a resumption of the downtrend. The NZD/USD is in no position to change the main trend to up, but there is room for a normal 50% to 61.8% correction.

The minor trend is also down. A move through .6335 will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is .6488 to .6192. Its retracement zone at .6340 to .6375 is the primary upside target.

The minor range is .6335 to .6192. Its 50% level or pivot is .6264.

Daily Technical Forecast

Based on the early price action and the current price at .6266, the direction of the NZD/USD on Tuesday is likely to be determined by trader reaction to the pivot at .6264.

Bullish Scenario

A sustained move over .6264 will indicate the presence of buyers. If this move is able to create enough upside momentum then look for the rally to possibly extend into the 50% at .6340 and a pair of downtrending Gann angles at .6348 and .6359.

Bearish Scenario

A sustained move under .6264 will signal the presence of sellers. This could lead to a retest of the recent low at .6192.