NZD/USD Forex Technical Analysis – May 23, 2019 ForecastBased on the early trade, the direction of the NZD/USD the rest of the session will be determined by trader reaction to the long-term downtrending Gann angle at .6489. The main trend is down according to the daily swing chart. The nearest downside targets are the October 16, 2018 main bottom at .6465 and the October 8, 2018 main bottom at .6424.
The New Zealand Dollar remains under pressure early Thursday as lingering U.S.-China trade tensions continue to weigh on sentiment. Sellers are also responding to heighted concerns about global growth and the news that the Trump administration is considering Huawei-like sanctions on Chinese video surveillance firm Hikvision.
Bearish traders are also betting on a further reduction of the cash rate before year end. That could be the reason why the New Zealand Dollar failed to draw support from Wednesday’s better-than-expected retail sales data.
The release of the Fed minutes on Wednesday failed to generate much movement in the currency. Even with the Fed saying it would leave interest rates unchanged for a lengthy period of time, the divergence in policy between the U.S. Federal Reserve and the Reserve Bank of New Zealand still favors the U.S. Dollar.
At 04:55 GMT, the NZD/USD is trading .6490, down 0.0004 or -0.08%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The nearest downside targets are the October 16, 2018 main bottom at .6465 and the October 8, 2018 main bottom at .6424.
The nearest main top is .6686. A trade through this level will change the main trend to up. This is highly unlikely. However, given the prolonged move down, only a closing price reversal bottom will provide some temporary relief from the selling.
The minor trend is also down. A trade through .6584 will change the minor trend to down. This will also shift momentum to the upside.
Daily Technical Forecast
The NZD/USD is still following three downtrending Gann angles, moving at a pace of 0.001 per day from the last main tops at .6686, .6784 and .6939.
Based on the early trade, the direction of the NZD/USD the rest of the session will be determined by trader reaction to the long-term downtrending Gann angle at .6489.
A sustained move under .6489 will indicate the presence of sellers. If the downside momentum continues then look for a break into .6465. If the Forex pair continues to follow the angle then look for a test of this level on May 27 – May 28.
Crossing to the strong side of the downtrending angle at .6489 will signal the return of buyers. Turning higher for the session will put the NZD/USD in a position to form a potentially bullish closing price reversal bottom. This could lead to a 2 to 3 day counter-trend rally.
The rally is likely to be labored because of the downtrending Gann angle resistance at .6504 and .6516. However, the latter is also the trigger point for an acceleration to the upside.