NZD/USD Forex Technical Analysis – In Position to Challenge Multi-Year Low at .5921

The New Zealand Dollar is inching higher on Friday, but remains in a position to post a lower close for the week as fears of a global downturn crushed commodity prices. Interest rate differentials have also been lifting the U.S. Dollar as traders added to wagers of more outsized rate hikes from the Federal Reserve.

At 06:00 GMT, the NZD/USD is trading .5972, up 0.0006 or +0.11%.

Domestic and International Economic News

In domestic news, the BusinessNZ Manufacturing Index came in at 54.9, while the previous month was revised higher to 53.5.

In other news, China reported data Friday that showed a pickup in growth in August from the prior month. The data also came in above expectations across the board.

Retail sales grew by 5.4% in August from a year ago, the fastest since the January-February period this year, according to figures released by the National Bureau of Statistics. August retail sales topped a Reuters forecast for 3.5% growth. Industrial Production and Fixed Asset Investment also exceeded expectations.

US Consumer Sentiment on Tap

Looking ahead on Friday, traders will get the opportunity to react to the latest figures on Preliminary University of Michigan Consumer Sentiment and Preliminary University of Michigan Inflation Expectations.

Consumer Sentiment is expected to edge up to 60.0 form 58.2. Last month, next year’s inflation expectations came in at 4.8%. This figure may come in lower.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at .5955 will indicate the selling pressure is getting stronger. A move through .6162 will change the main trend to up.

The nearest resistance is a pivot at .6059.

Daily Swing Chart Technical Forecast

Trader reaction to .5965 is likely to determine the direction of the NZD/USD on Friday.

Bearish Scenario

A sustained move under .5965 will indicate the presence of sellers. Taking out the intraday low at .5955 will indicate the selling pressure is getting stronger. This could trigger a further break into the May 15, 2020 main bottom at .5921. This is also the trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over .5965 will signal the presence of buyers. Taking out .6026 will change the minor trend to up. This could trigger an acceleration to the upside with .6059 the next likely target.