NZD/USD Forex Technical Analysis – New Minor Top Formed at .7034; Could Weaken on Close Under .6988 Pivot

The New Zealand Dollar is drifting lower late in the session after an earlier rally ran out of steam as U.S. Treasury yields edged higher. The price action also suggests end of the month/quarter position-squaring may be behind the Kiwi’s weak performance. The major players – banks and institutions – could also be heading to the sidelines early ahead of Friday’s bank holiday and the long Easter holiday weekend.

At 20:00 GMT, the NZD/USD is trading .6984, down 0.0001 or -0.02%.

Overnight, an ANZ Bank survey showed New Zealand’s business sentiment fell in March as the economy struggled from the lack of tourists and the unsustainable bounce in retail spending started to dissipate.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6943 will signal a resumption of the downtrend. The main trend will change to up on a move through .7270.

The minor trend is also down. A trade through .7034 will change the minor trend to up. This will shift momentum to the upside.

The NZD/USD is currently trading inside the main retracement zone at .7027 to .6924.

The minor range is .6943 to .7034. The NZD/USD is currently straddling its pivot at .6989. This pivot falls inside the main retracement zone.

The short-term range is .7270 to .6943. Its 50% level at .7107 is the next potential upside target.

Short-Term Outlook

The direction of the NZD/USD into the close on Wednesday is likely to be determined by trader reaction to the minor pivot at .6989.

Bearish Scenario

A sustained move under .6988 will indicate the presence of sellers. If this move creates enough downside momentum then look for a break into .6943, followed closely by .6824.

Bullish Scenario

A sustained move over .6989 will signal the presence of buyers. This could trigger a late session rally into .7027, followed closely by .7034. The latter is a potential trigger point for an acceleration into .7107.