NZD/USD Forex Technical Analysis – Next Major Upside Target is .6448The direction of the NZD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to yesterday’s close at .6369.
The New Zealand Dollar is up sharply for a third session this week on Wednesday as prospects of a swift global economic recovery from the coronavirus-induced collapse in world growth widened investor appetite for riskier assets. Meanwhile, the U.S. Dollar continued to lose its appeal as a safe-haven asset, encouraging investors to dump the greenback for higher-risk currencies.
At 03:36 GMT, the NZD/USD is trading .6410, up 0.0041 or +0.64%.
Funds continue to head toward economies that are seen to be recovering faster from the coronavirus pandemic.
External factors are also helping to underpin prices. In China, a private survey showed the services sector in the world’s second-largest economy returned to growth, which could bolster expectations for economic recovery. Additionally, fresh government stimulus globally also helped overshadow a host of other worries from the coronavirus to Hong Kong and growing U.S. civil unrest.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed early Wednesday when buyers took out yesterday’s high at .6371.
A trade through the nearest main bottom at .5921 will change the trend to down. This is unlikely, however.
Meanwhile, given the prolonged rally in terms of price and time, the NZD/USD is currently inside the window of time for a closing price reversal top. This chart pattern won’t change the trend to down, but it could trigger a 2 to 3 day correction.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the NZD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to yesterday’s close at .6369.
A sustained move over .6369 will indicate the presence of buyers. This could trigger a surge into the March 9 main top at .6448. Although we could see some profit-taking on the first test of this level, it should also be treated as a potential trigger point for an acceleration to the upside. The daily chart shows there is plenty of room to the upside with the July 19, 2019 main top at .6791 a longer-term upside target.
A sustained move under .6369 will signal the presence of sellers. This will put the NZD/USD in a position to form a closing price reversal top. If confirmed on the daily chart then look for the start of a possible 2 to 3 day correction.