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James Hyerczyk
New Zealand Kiwi

The New Zealand Dollar closed lower last week, pressured by expectations of rising U.S. interest rates, a drop in demand for risky assets and weak domestic data. A divergence between the monetary policies of the hawkish U.S. Federal Reserve and the dovish Reserve Bank of New Zealand is primarily driving the bearish price action. The Fed raised rates last week while the RBNZ showed no signs of changing policy.

For the week, the NZD/USD settled at .6619, down 0.0061 or -0.91%.

Weekly NZD/USD

Weekly Technical Analysis

The main trend is down according to the weekly swing chart. A trade through .6727 will change the main trend to up. A move through .6500 will signal a resumption of the downtrend. Last week, traders produced an inside move. This tends to indicate investor indecision and impending volatility. However, in this case, I think it indicates a shift in momentum back to down after two weeks of higher closes.

The short-term range is .6727 to .6500. Its 50% level or pivot is .6613.

The main range is .7061 to .6500. If the trend changes to up then its retracement zone at .6781 to .6847 will become the primary upside target.


Weekly Technical Forecast

Based on last week’s close at .6619, the direction of the NZD/USD this week is likely to be determined by trader reaction to the short-term pivot at .6614.

A sustained move over .6614 will signal the presence of buyers. The first target is a downtrending Gann angle at .6627. Overtaking this angle with conviction will indicate the buying is getting stronger. The next target angle is .6702. This angle is the most important resistance. It has stopped the rally the last two weeks.

Taking out .6701 could trigger an acceleration into .6721 and .6727.

A sustained move under .6614 will signal the presence of sellers. The first target is a downtrending Gann angle at .6727. Crossing to the weak side of this angle will put the NZD/USD in a bearish position with .6500 the next target.

The Forex pair is wide open under .6500 with the next major target coming in at .6398.

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