NZD/USD Forex Technical Analysis – Needs to Hold .7297 to Sustain Upside Momentum

The New Zealand Dollar is trading higher against the U.S. Dollar early Monday after surging through its January high at .7316, while moving closer to its April 13, 2018 main top at .7395. The move is being driven by optimism over the progress in curbing coronavirus infections boosted sentiment for riskier assets.

Traders are likely responding to the news that the Pfizer Inc and BioNTech SE COVID-19 vaccine appeared to stop the vast majority of recipients in Israel from infection, providing the first real-world indication that the immunization will curb transmission of the coronavirus.

At 04:19 GMT, the NZD/USD is trading .7310, up 0.0013 or +0.18%.

The Kiwi is basically being supported as traders sought currencies with close ties to the global commodities trade due to an improving economic outlook.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out the January 6 main top at .7316. The main trend will change to down on a move through .7158.

The new minor range is .7158 to .7338. Its 50% level at .7248 is the nearest support. This level will move higher as the uptrend continues.

The main range is .7003 to .7338. Its retracement zone at .7170 to .7131 is support. This zone is also controlling the near-term direction of the NZD/USD.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Monday is likely to be determined by trader reaction to Friday’s close at .7297.

Bullish Scenario

A sustained move over .7297 will indicate the presence of buyers. Taking out the intraday high at .7338 will indicate the buying is getting stronger. This could create the upside momentum needed to challenge the April 13, 2018 main top at .7395.

Bearish Scenario

A sustained move under .7297 will signal the presence of sellers. This move generates enough downside momentum then look for a hard break toward the pivot at .7248.

A close below .7297 will form a closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction.

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