NZD/USD Forex Technical Analysis – Rangebound Until RBNZ, Fed Make Their Next Major Moves

The New Zealand Dollar finished lower on Thursday as worries about an early Fed tapering outweighed expectations of a rate hike by the Reserve Bank of New Zealand (RBNZ) on August 18. The RBNZ is expected next Wednesday to be among the first of the world’s advanced economies to raise interest rates in the pandemic era as its recovery continues to run red-hot.

On Thursday, the NZD/USD settled at .7001, down 0.0040 or -0.57%.

The Kiwi was pressured during the U.S. session against the U.S. Dollar after data showed U.S. producer prices posted their largest annual increase in more than a decade in the 12 months through July, suggesting inflation pressures remain strong. Additionally, data showed the number of Americans filing claims for unemployment benefits fell again last week as the economic recovery from the COVID-19 pandemic continued.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7089 will signal a resumption of the uptrend. A move through .6902 will change the main trend to down.

The minor trend is also up. A trade through .6969 will change the minor trend to down. This will also shift momentum to the downside.

The NZD/USD is currently trading inside a wide trading range.

On the upside, potential resistance levels are lined up at .7027, .7099 and .7150.

On the downside, potential support levels come in at .6985, .6960 and .6924.

Daily Swing Chart Technical Forecast

The early direction of the NZD/USD on Friday is likely to be determined by trader reaction to the pivot at .7027.

Bullish Scenario

A sustained move over .7027 will indicate the presence of buyers. This could lead to a labored rally with potential upside targets .7062, .7089, .7099 and .7105.

Bearish Scenario

A sustained move under .7027 will signal the presence of sellers. This could lead to a grind to the downside with potential support levels lined up at .6985, .6969, 6960 and .6924.

Side Notes

We’re looking for choppy, two-sided price action until the Fed announces its decision about an early tapering. This could be at the end of August at the central bankers’ symposium at Jackson Hole, Wyoming or when the Fed meets on September 21-22. By then policymakers will have another Non-Farm Payrolls report and CPI report under their belts.