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James Hyerczyk

Lower demand for risk is helping to pressure the New Zealand Dollar on Friday. Weakness in Asia Pacific shares ahead of the release of trade data from China is likely the reason behind the decline. Traders could also be squaring positions in front of the release of the U.S. Non-Farm Payrolls report at 13:30 GMT.

At 05:11 GMT, the NZD/USD is trading .6451, down 0.0006 or -0.11%.

Earlier today, a Reserve Bank of New Zealand (RBNZ) survey showed New Zealand’s near-term inflation expectations rose in the first quarter of 2020.

The RBNZ’s quarterly survey of expectations showed business managers forecast annual inflation to average 1.88% over the coming year, from 1.66% in the previous survey in November.


Daily Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed when sellers took out the previous main bottom at .6449. A trade through .6503 will change the main trend to up. The next downside target is the November 26 main bottom at .6395.

The main range is .6204 to .6758. The market is currently trading inside its retracement zone at .6481 to .6416. This zone is controlling the near-term direction of the NZD/USD.

The long-term retracement zone at .6498 to .6567 is resistance. Combining the two retracements zones makes .6481 to .6498 important resistance.


Daily Technical Forecast

Given the early downside momentum and the current price at .6451, the direction of the NZD/USD on Friday is likely to be determined by trader reaction to the support cluster at .6432 to .6429.

Bearish Scenario

A sustained move under .6429 will indicate that the selling pressure is getting stronger. The first downside target is .6416. Taking out this level could drive the NZD/USD into .6395.

A trade through .6395 could trigger an acceleration to the downside with .6322 the next downside target.

Bullish Scenario

Holding .6432 will signal the presence of buyers. The first upside target will be yesterday’s close at .6458. Overcoming this level could trigger a rally into a potential resistance cluster at .6481 to .6483.

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