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James Hyerczyk

A stronger U.S. Dollar drove the New Zealand Dollar lower on Friday as well as concerns over the domestic economy. The greenback rose after strong U.S. housing data confirmed the resilience of the U.S. consumer.

U.S. homebuilding surged to a 13-year high in December suggesting the housing market recovery was back on track amid low mortgage rates.

On Friday, the NZD/USD settled at .6611, down 0.0023 or -0.35%.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart; however, momentum is trending lower. The main trend will change to down on a move through the last main bottom at .6554. A move through .6756 will signal a resumption of the uptrend.

The minor trend is down. This confirms the shift in momentum to down. A trade through .6665 will change the minor trend to up. A move through .6584 will indicate the selling is getting stronger.

The main range is .6791 to .6204. Its retracement zone at .6567 to .6497 is support.

The intermediate range is .6204 to .6756. Its retracement zone at .6480 is a second support zone.

The short-term range is .6756 to .6584. Its retracement zone at .6670 to .6690 is potential resistance.


Daily Swing Chart Technical Forecast

Based on Friday’s close at .6611, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the minor pivot at .6625.

Bearish Scenario

A sustained move under .6625 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the minor bottom at .6584, the Fibonacci level at .6567 and the main bottom at .6554. The latter is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over .6625 will signal the presence of buyers. This could trigger a surge into a resistance cluster at .6665 to .6670.

Overtaking .6670 targets .6690. This is a potential trigger point for an acceleration to the upside.

Side Notes

The formation of a secondary lower top at .6665 will be a bearish sign.

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