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NZD/USD Forex Technical Analysis – Minor Pivot at .6302 Controlling Price Action

Based on Friday’s price action and the close at .6296, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the minor pivot at .6302.
James Hyerczyk
New Zealand Dollars

The New Zealand Dollar posted a second consecutive inside move on Friday while posting a slight gain for the session. The price action suggests investor indecision and impending volatility. After surprising traders with a half-percent rate cut in the Official Cash Rate (OCR) in August, the Reserve Bank of New Zealand (RBNZ) left rates unchanged earlier in the week

On Friday, the NZD/USD settled at .6296, up 0.0003 or +0.04%.

The indecision from traders on Thursday and Friday was likely fueled by the two trains of thought currently controlling the price action. Supporting the NZD/USD was Reserve Bank Governor Adrian Orr, who said a rate cut in November “wasn’t a dead certainty”. Capping the Kiwi were a slew of bank analysts who are forecasting a 25-basis point cut in November that would take the OCR to 0.75 percent.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6255 will signal a resumption of the downtrend. The main trend will change to up on a move through .6451.

The minor trend is also down. It will change to up on a trade through .6349. This will also shift momentum to the upside.

The minor range is .6255 to .6349. Its 50% level or pivot is .6302. This level controlled the price action most of last week.

The short-term range is .6451 to .6255. If the minor trend changes to up then its retracement zone at .6353 to .6376 will become the next upside target zone.

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Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at .6296, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the minor pivot at .6302.

Bearish Scenario

A sustained move under .6302 will indicate the presence of sellers. If this move creates enough downside momentum then look for a test of .6255. Taking out this level could trigger an acceleration to the downside with the next target the August 24, 2015 main bottom at .6207.

Bullish Scenario

A sustained move over .6302 will signal the presence of buyers. If this move generates enough upside momentum then look for a potential surge into the minor top at .6349, followed by the short-term 50% level at .6353.

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