NZD/USD Forex Technical Analysis – Minor Trend, Momentum Shift to Up on Trade Through .6856

The New Zealand Dollar posted a volatile outside move, but managed to settle nearly flat on Tuesday. The price action suggests investor indecision and impending volatility. It also indicates investors may be at a loss at how to play the potential onset of a new wave of omicron coronavirus variant infections since they don’t have a lot of information.

On Tuesday, the NZD/USD settled at .6824, down 0.0001 or -0.02%.

“(The Omicron variant) has injected a considerable degree of uncertainty with a need for patience as the scientific and health community assess its severity, the effectiveness of current vaccines, and the time frame for the production and distribution of new Omicron-specific vaccines if needed,” RBC Capital strategists told clients in a note.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing. However, Tuesday’s price action suggests momentum may be getting ready to shift to the upside.

A trade through .6773 will signal a resumption of the downtrend. The main trend will change to up on a move through the nearest main top at .7219.

The minor trend is also down. A trade through .6856 will change the minor trend to up. This will shift momentum to the upside.

The first minor range is .6856 to .6773. Its 50% level or pivot is .6814.

The second minor range is .7053 to .6773. Its 50% level at .6913 is potential support.

The main range is .7219 to .6773. Its retracement zone at .6996 to .6049 is the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this area.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD early Wednesday is likely to be determined by trader reaction to .6814.

Bullish Scenario

A sustained move over .6815 will indicate the presence of buyers. The first upside target is .6856. Taking out this level will indicate the buying is getting stronger. This could trigger a surge into .6913. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .6814 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into .6773.

Taking out .6773 with strong volume could trigger an acceleration to the downside with the November 2, 2020 main bottom at .6589 the next likely target.