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.

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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