NZD/USD Forex Technical Analysis – Momentum Shifts to Down on Trade Through .7059

The U.S. Dollar is on the defensive early Wednesday against the New Zealand Dollar as the Kiwi continues to hover around the .7120 level that it reached on Monday for the first time since April 2018.

The New Zealand Dollar continues to be supported by a positive outlook for its economy, expectations of new U.S. stimulus that should weaken the greenback and speculation that the Fed will sound very dovish at the end of its meeting despite announcing its long-term view of the economy has improved due to the rollout of the vaccine.

At 03:13 GMT, the NZD/USD is trading .7103, up 0.0014 or +0.19%.

The price action also suggests that bullish traders are anticipating New Zealand to announce its biggest ever increase in GDP on Thursday. However, there are some doubts that the country will be able to sustain the anticipated growth rate.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7120 will signal a resumption of the uptrend. The main trend will change to down on a move through .7006.

The minor trend is also up. A trade through .7059 will change the minor trend to down. This will shift momentum to the downside.

The first minor range is .7120 to .7059. Its 50% level at .7089 is controlling the direction of the NZD/USD early Wednesday.

The second minor range is .7006 to .7120. Its 50% level at .7063 is support. This level stopped the selling on Tuesday.

Additional support is the price cluster at .7008 to .7006, and the minor 50% level at .6965.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the NZD/USD on Wednesday will be determined by trader reaction to the pivot at .7089.

Bullish Scenario

A sustained move over .7089 will indicate the presence of buyers. If this move generates enough upside momentum then look for a breakout over .7120.

Bearish Scenario

A sustained move under .7089 will signal the presence of sellers. This could trigger a break into the support cluster at .7063 to .7059. The latter is a potential trigger point for an acceleration to the downside with another support cluster at .7008 to .7006 the next likely downside target.