NZD/USD Forex Technical Analysis – Strengthens Over .6074, Weakens .6043

The New Zealand Dollar is trading flat early Wednesday despite the release of better than expected labor market data. The quarterly Employment Change report came in at 0.7%, well-above the -0.2% forecast. The previous quarter was also revised higher to 0.1%. The Unemployment Change was 4.2%, better than the 4.4% forecast, but greater than the previously reported 4.0%.

At 00:06 GMT, the NZD/USD is at .6055, up 0.0001 or +0.01%.

“Our surveys captured a robust labor market in the period before New Zealand went into COVID-19 lockdown. The unemployment rate has remained stable at around 4 percent since late 2018, after trending down since late 2012,” labor market and household statistics senior manager at Stats NZ Sean Broughton said.

Although the numbers are better than the estimates, everyone knows they don’t reflect the full impact of the Coronavirus on the labor market. Traders expect to get a better picture of the damage to the labor market due to the virus pandemic in the June 2020 quarterly report.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on April 30.

A trade through .6176 will negate the closing price reversal top and signal a resumption of the uptrend. A move through .5911 will change the main trend to down.

The minor trend is also up. A trade through .6009 will change the minor trend to down. This will confirm the shift in momentum to the downside.

The main range is .6448 to .5469. The NZD/USD is currently trading inside its retracement zone at .5958 to .6074. This zone is controlling the longer-term direction of the Forex pair.

The short-term range is .5911 to .6176. The NZD/USD has been straddling its 50% level at .6043 for several days.

The intermediate range is .5469 to .6176. If the main trend changes to down then its retracement zone at .5822 to .5739 will become the next downside target zone.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6055, the direction of the NZD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the main Fibonacci level at .6074 and the short-term 50% level at .6043.

Bearish Scenario

A sustained move under .6043 will indicate the presence of sellers. This could lead to a quick test of the minor bottom at .6009. If this fails then look for the selling to possibly extend into the main 50% level at .5958.

Bullish Scenario

A sustained move over .6074 will signal the presence of buyers. If this move generates enough upside momentum then look for a possible extension of the rally into the main top at .6176.