NZD/USD Forex Technical Analysis – Needs to Close Over .7150 to Sustain Upside Momentum

The New Zealand Dollar hit another multi-year high early Wednesday as the U.S. Dollar continued to get trashed as investors looked past a new delay in U.S. stimulus checks and maintained bets that additional financial aid was still likely.

The greenback has fallen and the higher-yielding Kiwi has risen since President Donald Trump signed a coronavirus aid and spending bill on Sunday, because more stimulus for the world’s largest economy reduces demand for the perceived safety of holding the greenback.

At 06:15 GMT, the NZD/USD is trading .7180, up 0.0030 or +0.42%.

Bullish Kiwi traders are holding out hope for additional stimulus even though U.S. Senate Majority Leader Mitch McConnell on Tuesday blocked immediate consideration of a measure to increase COVID-19 relief payments to $2,000, adding another twist to fractious negotiations over fiscal stimulus.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out the previous main top at .7171. The main trend will change to down on a move through .7003.

The minor trend is also up. A trade through .7084 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is .7003 to .7189. Its 50% level at .7096 is support.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD into the close on Wednesday is likely to be determined by trader reaction to yesterday’s close at .7150.

Bullish Scenario

A sustained move over .7150 will indicate the presence of buyers. Taking out the intraday high at .7189 will indicate the buying is getting stronger. This would keep the Kiwi on track for an eventual test of the April 13, 2018 main top at .7395.

Bearish Scenario

A sustained move under .7150 will signal the return of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the pivot at .7096.

Side Notes

A close under .7150 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a short-term correction.

Look for a spike to the upside if the U.S. Senate approves additional aid, but the move may not last because traders seem to be pricing in the possibility.

For a look at all of today’s economic events, check out our economic calendar.