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NZD/USD Forex Technical Analysis – July 26, 2019 Forecast

By:
James Hyerczyk
Published: Jul 26, 2019, 07:30 UTC

Based on the early price action, the direction of the NZD/USD on Friday is likely to be determined by trader reaction to the short-term Fibonacci level at .6663.

NZD/USD

The New Zealand Dollar continues to weaken against the U.S. Dollar on Friday as investors pared expectations for aggressive Federal Reserve interest rate cuts in response to stronger-than-expected U.S. economic data on Thursday and comments from European Central Bank President Mario Draghi. Traders are also positioning themselves ahead of the release of the U.S. Advance GDP report at 12:30 GMT.

At 07:10 GMT, the NZD/USD is trading .6655, down 0.0009 or -0.14%.

The Advance GDP report is expected to show the economy grew at a 1.8% clip, slower than the previously reported 3.1%. Some traders think the number may come in higher in the wake of Thursday’s stronger than expected U.S. Durable Goods report.

NZDUSD
Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the formation of the closing price reversal top on July 19 at .6791.

A trade though .6791 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through .6583.

The short-term range is .6583 to .6791. The NZD/USD is now trading on the weak side of its retracement zone at .6663 to .6687. This zone is new resistance.

On the upside, the major resistance zone is .6710 to .6764.

On the downside, the major support zone is .6636 to .6599. Since the main trend is up, buyers could come in on the first test of this area. The lower or Fibonacci level at .6599 is the last support before the .6583 main bottom.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the NZD/USD on Friday is likely to be determined by trader reaction to the short-term Fibonacci level at .6663.

Bullish Scenario

A sustained move over .6663 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into the short-term 50% level at .6687. Overtaking this level could trigger a rally into the main 50% level at .6710.

Bearish Scenario

A sustained move under .6663 will signal the presence of sellers. This could generate the downside momentum needed to challenge the next 50% level at .6636. Look for an acceleration to the downside if this level fails to attract buyers. This could lead to an eventual test of .6599.

The Fib level at .6599 is the last major support level before the .6583 main bottom. Look for buyers to come in on a test of this level in an effort to defend the uptrend.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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