NZD/USD Forex Technical Analysis – Next Potential Upside Target .6340 – .6375 Retracement Zone

The New Zealand Dollar is trading flat on Friday after a small spike to the upside on Thursday was fueled by another plunge in U.S. Treasury yields and consequently the U.S. Dollar. Regardless of the strength this week, the Kiwi is poised to move lower over the near-term according to Westpac.

A sharp decline in the number of visitor arrivals to New Zealand should contribute to a fundamental backdrop that will likely add further downside pressures to the New Zealand Dollar say economist at Aussie and Kiwi lender Westpac, Poundsterlinglive reported.

At 04:18 GMT, the NZD/USD is trading .6313, up 0.0003 or +0.04%.

“The flow of NZ economic data over the next month or two will be unflattering, and should weigh on NZ markets. The main impact will initially be seen in visitor arrivals, in turn affecting services exports,” says Imre Speizer, Chief Economist with Westpac in Auckland.

Westpac is forecasting a 25 basis point cut, rather than the 50 basis point cut markets have priced. The New Zealand Dollar could actually find some temporary relief if the Reserve Bank of New Zealand (RBNZ) cuts by 0.25%, as this would disappoint markets which expect a greater commitment.

The RBNZ is scheduled to make its monetary policy and interest rate decisions on March 25.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6192 will signal a resumption of the downtrend. The main trend will change to up on a move through .6488.

The minor trend is also down. A trade through .6335 will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is .6488 to .6192. Its retracement zone at .6340 to .6375 is the primary upside target. Since the main trend is down, sellers could come in on a test of this zone.

The minor range is .6335 to .6192. Its 50% level or pivot at .6263 is providing support this week. Investor sentiment could shift to the downside if sellers take out this level.

Daily Technical Forecast

Based on the early price action and the current price at .6313, the direction of the NZD/USD the rest of the session on Friday is likely to be determined by trader reaction to the uptrending Gann angle at .6292.

Bullish Scenario

A sustained move over .6292 will indicate the presence of buyers. This could lead to a labored rally with potential targets downtrending Gann angles at .6318 and .6329, a minor top at .6335 and the short-term 50% level at .6340. The latter is a potential trigger point for a surge into the short-term Fibonacci level at .6375.

Bearish Scenario

A sustained move under .6292 will signal the presence of sellers. The first target is the pivot at .6264. If this fails then look for the selling to extend into the next uptrending Gann angle at .6242.