NZD/USD Forex Technical Analysis – Sideways-to-Lower Trade Fueled by Below Average Volume

The New Zealand Dollar is inching lower on weak volume early Monday. The below average volume is being fueled by two days of bank holidays to start the week. Without any major economic releases this week in New Zealand or the United States, we could be looking at a rangebound trade. Based on the early price action, there could be a slight bias to the downside.

The trend changed to up late last week but there has been no follow-through to the upside following the move. The holiday volume is likely behind the limited reaction causing investors to be cautious about buying strength. If this is the case then we’ll probably see a pullback into support before there is another attempt to move higher.

At 06:44 GMT, the NZD/USD is trading .6813, down 0.0004 or -0.06%.

In the absence of fresh economic data, traders are going to have to rely on investor sentiment to drive the price action. At this time, sentiment is being driven by the Omicron coronavirus variant.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6841 will signal a resumption of the uptrend. A move through .6702 will change the main trend to down.

The short-term range is .6868 to .6702. Its 50% level at .6785 is the nearest support.

The minor range is .6702 to .6841. Its retracement zone at .6771 to .6755 is another potential downside target. Since the main trend is up, buyers are likely to come in on a test of this area.

On the upside, the nearest resistance is an intermediate 50% level at .6878. This is a potential trigger point for an acceleration to the upside with the next major target a retracement zone at .6961 to .7022.

Daily Swing Chart Technical Forecast

The lack of momentum and the low volume makes it difficult to buy strength or a breakout over .6841, which is a potential trigger point for an acceleration into .6878.

The weak momentum and volume could give investors an excuse to sell, which would make .6785 the first downside target, followed by .6771 to .6755.

The minor retracement zone at .6771 – .6755 is a value area. And since the main trend is up, were looking for buyers to come in on the first test of this area.