Based on the early price action and the current price at .6529, the direction of the NZD/USD the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at .6546.
The New Zealand Dollar is trading lower for a third straight session on Wednesday as traders continue to take profits following the Kiwi’s inability to smash through a key technical retracement level at .6567. The price action suggests bullish traders are willing to let the currency retreat into a value zone where they can regroup before taking another run at the resistance level and the last top at .6576. Essentially, given the uncertainty over the U.S.-China trade deal, traders are reluctant to buy strength at current price levels.
At 06:34 GMT, the NZD/USD is trading .6529, down 0.0017 or -0.25%.
The main trend is up according to the daily swing chart. A trade through .6576 will signal a resumption of the uptrend. The main trend will change to down on a move through .6395. This is highly unlikely. However, there is room for a normal 50% to 61.8% retracement of the last rally.
The market is currently trading inside the longer-term retracement zone at .6497 to .6567.
The short-term range is .6395 to .6576. Its retracement zone at .6485 to .6464 is a value zone and primary downside target. Since the main trend is down, I expect to see buyers show up on a test of this area.
Based on the early price action and the current price at .6529, the direction of the NZD/USD the rest of the session is likely to be determined by trader reaction to the downtrending Gann angle at .6546.
A sustained move under .6546 will indicate the presence of sellers. The first downside target is a pair of Gann angles at .6516 and .6515. Watch for a technical bounce.
If .6515 fails as support then look for a break into the major 50% level at .6497, followed by the short-term 50% level at .6485.
A sustained move over .6546 will signal the return of buyers. If this move is able to generate enough upside momentum then we could see a rally into a Gann angle at .6561, the major Fibonacci level at .6567, a downtrending Gann angle at .6569 and the main top at .6576.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.