NZD/USD Forex Technical Analysis – New Secondary Lower Top .7270, Next Target Area .7099 – .7096

The New Zealand Dollar is trading slightly lower early Monday despite a weaker U.S. Dollar and a dip in U.S. Treasury yields. The pressure is likely being fueled by new worries of an imminent second recession in the country and chatter supporting the notion that the Reserve Bank (RBNZ) will not be raising rates sooner than expected.

At 05:33 GMT, the NZD/USD is trading .7158, down 0.0006 or -0.09%.

Last week, Statistics New Zealand reported that gross domestic product (GDP) fell 1.0% in the three months through December, short of a Reuters poll forecast of 0.1% growth.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7099 will signal a resumption of the downtrend. A new lower main top has formed at .7270, a trade through this level will change the main trend to up.

The minor trend is also down. It changed to down on Friday when sellers took out .7151. This shifted momentum to the downside after the Forex pair hit a two-week high last Thursday.

The NZD/USD is currently trading on the weak side of the main retracement zone at .7180 to .7234. This zone is controlling the near-term direction of the Forex pair. This area is new resistance.

The short-term range is .7465 to .7099. Its retracement zone at .7282 to .7325 is additional resistance.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Monday is likely to be determined by trader reaction to the main Fibonacci level at .7180.

Bearish Scenario

A sustained move under .7179 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the potential support cluster at .7099 to .7096.

Bullish Scenario

A sustained move over .7180 will signal the presence of buyers. If this move generates enough upside momentum then look for a possible surge into the main 50% level at .7234. Since the trend is down, sellers could come in on a test of this level. Overtaking it could drive the NZD/USD into .7270 to .7282.

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