The New Zealand Dollar is trading slightly higher early Wednesday despite a report showing deteriorating business confidence.

Earlier in the session, the New Zealand Institute of Economic Research (NZIER) Quarterly Survey of Business Opinion (QSBO) showed business confidence fell to its lowest level since March 2009, with a net 31 percent of businesses expecting a deterioration in general economic conditions over the coming months.

At 0030 GMT, the NZD/USD is trading .6682, up 0.0009 or +0.15%.

In other news, Statistics New Zealand reported that the number of building consents rose 13% in May after falling 7.9% in April. Later today, investors will get the opportunity to react to China’s Caixin Services PMI data, and a slew of U.S. economic data including the ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower. The closing price reversal top on July 1 and its subsequent confirmation on Tuesday, confirmed the shift in momentum. However, there was very little follow-through to the downside after the confirmation.

A trade through .6727 will negate the closing price reversal top and signal a resumption of the uptrend. The NZD/USD isn’t close to changing the main trend to down, but there is room for a 50% to 61.8% retracement.

The minor trend is up. A trade through .6656 will change the main trend to down. This will reaffirm the shift in momentum.

The minor range is .6727 to .6656. Its 50% level or pivot at .6692 will determine the strength of the NZD/USD today.

The main retracement zone at .6710 to .6764 is resistance. This zone stopped the rally on Monday at .6727.

The short-term range is .6487 to .6727. If the minor trend changes to down then its retracement zone at .6607 to .6579 will become the primary downside target.

Daily Technical Forecast

Based on the early price action, the direction of the NZD/USD on Wednesday is likely to be decided by trader reaction to the short-term Gann angle at .6687.

Bullish Scenario

Crossing to the strong side of the downtrending Gann angle at .6687 will indicate the presence of buyers. This could lead to a labored rally with the first target the minor pivot at .6692. Overtaking the pivot will mean the buying is getting stronger. The next targets are a downtrending Gann angle at .6707 and the main 50% level at .6710.

Overtaking .6710 will put the NZD/USD in a position to challenge the main top at .6727.

Bearish Scenario

A sustained move under .6687 will signal the presence of sellers. If this move creates enough downside momentum then look for a break into the minor bottom at .6656. Taking out this level will lead to a test of the steep downtrending Gann angle at .6647. Crossing to the weak side of this angle will put the NZD/USD in a bearish position with possible targets coming in at .6617 and .6607.