NZD/USD Forex Technical Analysis – Looking for Near-Term Break into .6515 to .6487

The New Zealand Dollar fell on Tuesday in sympathy with a weaker Australian Dollar after the Reserve Bank of Australia (RBA) opened the door to another cut in interest rates as early as February. The minutes of the December RBA policy meeting showed the central bank’s board was concerned that wage growth was too weak to revive either inflation or consumption.

On Tuesday, the NZD/USD settled at .6574, down 0.0023 or -0.34%.

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 December 13 at .6636 and its subsequent confirmation.

A trade through .6636 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through the last swing bottom at .6523.

The short-term range is .6523 to .6636. Its 50% level at .6580 is resistance.

The intermediate range is .6395 to .6636. Its retracement zone at .6515 to .6487 is the next downside target.

The major retracement zone at .6497 to .6567 is controlling the longer-term term direction of the NZD/USD. The Forex pair is currently straddling the upper or Fibonacci level of this zone.

Daily Technical Forecast

Based on Tuesday’s price action and the close at .6574, the direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to the price cluster formed by the Fibonacci level at .6567 and the uptrending Gann angle at .6565.

Bullish Scenario

A sustained move over .6567 will indicate the presence of buyers. The first upside target is the downtrending Gann angle at .6576, followed by the 50% level at .6580.

Overcoming .6580 could trigger an acceleration to the upside with the first target a downtrending Gann angle at .6606.

Bearish Scenario

A sustained move under .6565 will signal the presence of sellers. This is a potential trigger point for an acceleration to the downside with the next targets the main bottom at .6523 and the 50% level at .6515.

Side Notes

We could see limited price action on Wednesday ahead of the release of the New Zealand GDP report and the Australian employment data early Thursday