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James Hyerczyk

The New Zealand Dollar strengthened against the U.S. Dollar on Friday as risk appetite returned following the de-escalation of geopolitical tensions between the United States and Iran. Hope of a better economy may have also underpinned the Kiwi with the scheduled signing of the trade deal between the U.S. and China in the White House on January 15.

On Friday, the NZD/USD settled at .6635, up 0.0022 or +0.33%.

A disappointing U.S. jobs report and a strong performance by the Chinese Yuan were also supportive for the NZD/USD.


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 trade through .6554. A move through .6758 will signal a resumption of the uptrend.

The short-term range is .6554 to .6758. Its retracement zone comes in at .6656 to .6632. This area is likely to act like a pivot this week with the NZD/USD weakening under .6632 and strengthening over .6656.

The major range is .6791 to .6204. Its retracement zone at .6567 to .6497 is controlling the longer-term direction of the NZD/USD.


Daily Gann Angle Technical Analysis

The NZD/USD has been walking down a steep Gann angle, moving at a rate of .0020 per day, since the .6758 main top on December 31. It came in at .6618 on Friday.

The NZD/USD closed at .6635 on Friday, putting it on the strong side of the downtrending Gann angle. This is a sign that the buying may be greater than the selling at current price levels.

On the downside, the major uptrending Gann angle support came in at .6559. It formed a potential support cluster with the major Fibonacci level at .6567, making the angle a valid downside target.

Short-Term Outlook

Closing on the strong side of the downtrending Gann angle could lead to early strength on Monday. Crossing to the strong side of the short-term retracement zone will indicate the buying is getting stronger.

Falling to the weak side of the downtrending Gann angle will signal the return of sellers. This could create the downside momentum needed to challenge the potential support cluster at .6567, .6559 and .6554.

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