NZD/USD Forex Technical Analysis – July 30, 2019 Forecast

The New Zealand Dollar is trading in a tight range against the U.S. Dollar for a second straight session on Tuesday. With most of the major players on the sidelines ahead of the U.S. Federal Reserve policy announcement and interest rate decision on Wednesday, the currency is posting an inside move, which typically indicates investor indecision and impending volatility.

At 06:57 GMT, the NZD/USD is trading .6627, down 0.0050 or -0.08%.

The Kiwi has been under pressure since July 19 as traders have been pricing in a rate cut by the Reserve Bank of New Zealand for August 6. Traders also expect the Fed to trim its benchmark rate by 25-basis points. However, the main interest for investors will be the guidance offered by Fed Chair Jerome Powell in his post-meeting press conference.

Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of a closing price reversal top on July 19 at .6791. The main trend will actually turn down on a trade through .6583.

Today is the seventh day down from the last main top, which puts the NZD/USD inside the window of time for a potentially bullish closing price reversal bottom.

The main range is .6487 to .6791. Its retracement zone at .6639 to .6603 is potential support. It is currently being tested.

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

Daily Technical Forecast

Based on the early price action and the current price at .6627, the direction of the NZD/USD on Tuesday is likely to be determined by trader reaction to the 50% level at .6639.

Bearish Scenario

A sustained move under .6639 will indicate the presence of sellers. Taking out yesterday’s low at .6616 will indicate the selling is getting stronger with the first target the Fibonacci level at .6603.

We could see a technical bounce on the first test of .6603, but if it fails then look for the selling to possibly extend into the main bottom at .6583. The main trend will turn down on a trade through this bottom with the next target angle coming in at .6567.

Bullish Scenario

A sustained move over .6639 will signal the presence of buyers. This could lead to a quick test of an uptrending Gann angle at .6647, followed closely by a downtrending Gann angle at .6651. This angle is a potential trigger point for an acceleration to the upside. There is no target at this time.

Overview

Essentially, the direction of the NZD/USD over the near-term will be determined by trader reaction to the retracement zone at .6639 to .6603. Look for an upside bias to build on a sustained move over .6639 and for the downside bias to continue on a sustained move under .6603.