NZD/USD Forex Technical Analysis – Strengthens Over .7180, Weakens Under .7170

The New Zealand Dollar is edging higher early Monday as a slight dip in Treasury yields weighs on the U.S. Dollar. Firmer U.S. stock index futures indicate early demand for higher risk assets.

In economic news over the weekend, Treasury Secretary Janet Yellen said she didn’t think inflation posed a significant risk now that the Biden administration’s COVID relief is signed and on its way to implementation.

In other news, New Zealand Visitor Arrivals (YoY) came in at -98.7% in January versus -98.9% in December. Government data showed overseas visitor arrivals decreased by 500 to 5,400 in January 2021, compared with December 2020.

Traders now await the release of economic data from China, including Industrial Production, Retail Sales, Fixed Asset investment and the Unemployment Rate.

At 01:32 GMT, the NZD/USD is trading .7213, up 0.0037 or +0.51%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7099 will signal a resumption of the downtrend. The main trend will change to up on a move through the last main swing top at .7465.

The minor trend is also down. A trade through .7241 will change the minor trend to up. This will also shift momentum to the upside.

The main range is .7003 to .7465. The NZD/USD is currently trading inside its retracement zone at .7234 to .7179. This zone is controlling the near-term direction of the Forex pair.

The short-term range is .7465 to .7099. Its retracement zone at .7282 to .7325 is the primary upside target. Since the main trend is down, sellers could come in on the first test of this area.

The minor range is .7099 to .7241. Its retracement zone at .7170 to .7153 is potential support. This zone stopped the selling at .7151 last week.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Monday is likely to be determined by trader reaction to .7180 and .7170.

Bullish Scenario

A sustained move over .7180 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into .7234, followed closely by .7241. The latter is a potential trigger point for an acceleration to the upside with the next major target zone coming in at .7282 to .7325.

Bearish Scenario

A sustained move under .7170 will signal the presence of sellers. The first downside target is .7153, followed closely by .7151. The latter is a potential trigger point for an acceleration to the downside with the next target a potential support cluster at .7099 to .7096.

For a look at all of today’s economic events, check out our economic calendar.