Based on the early price action and the current price at .6240, the direction of the NZD/USD is likely to be determined by trader reaction to a potential Gann angle resistance cluster at .6269 to .6271.
The New Zealand Dollar hit a four-year low early Tuesday in reaction to a strong U.S. Dollar and another weak business survey. Optimism over U.S.-China trade relations continued to underpin the U.S. Dollar, which hit multi-year highs against a basket of currencies. Additionally, a private sector gauge dropped to a multi-year low, driving the Kiwi lower.
At 03:00 GMT, the NZD/USD is trading .6240, down 0.0024 or -0.39%.
In domestic news, a third quarter Business Confidence report from the New Zealand Institute of Economic Research (NZIER) came in at -40%, well below the previously reported -34%. This was also below the historical low of -35%, reported in April 2009.
The main trend is down according to the daily swing chart. The trade through the previous main bottom at .6255 signaled a resumption of the downtrend. The main trend will change to up on a trade through .6349.
Based on the early price action and the current price at .6240, the direction of the NZD/USD is likely to be determined by trader reaction to a potential Gann angle resistance cluster at .6269 to .6271.
A sustained move under .6269 will indicate the presence of sellers. If this move continues to generate enough downside momentum then look for a break into the August 24, 2015 main bottom at .6207.
Overtaking and sustaining a rally over .6271 will signal the return of buyers. This will also put the NZD/USD in a position to form a closing price reversal bottom.
If this move create enough upside momentum then look for the rally to possibly extend into a downtrending Gann angle at .6309. This is the last potential resistance angle before the .6349 main top.
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.