NZD/USD Forex Technical Analysis – Strengthens Over .7232, Weakens Under .7206

The New Zealand Dollar is trading sharply higher on Wednesday after data released by Statistics New Zealand showed the country’s jobless rate dropped in the fourth quarter, beating analyst forecasts, as the economy recovers from the COVID-19 pandemic.

The seasonally adjusted unemployment rate dropped to 4.9% in the December 2020 quarter from 5.3% in the September 2020 quarter, Statistics New Zealand said in the statement. That beat forecasts by economists polled by Reuters who had expected an unemployment rate of 5.6%.

At 06:43 GMT, the NZD/USD is trading .7216, up 0.0021 or +0.28%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower the past six sessions. A trade through .7248 will signal a resumption of the uptrend. The main trend will change to down on a move through .7106.

The minor trend is down. This is controlling the momentum. A trade through .7226 will change the minor trend to up. This will shift momentum to the upside. A new minor bottom has formed at .7135.

The main range is .7003 to .7316. Its retracement zone at .7159 to .7123 is support.

The short-term range is .7316 to .7096. The NZD/USD is currently testing its retracement zone at .7206 to .7232. Trader reaction to this zone will determine the near-term direction of the Forex pair.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the NZD/USD will be determined by trader reaction to the short-term 50% level at .7206.

Bullish Scenario

A sustained move over .7206 will indicate the presence of buyers. This could trigger a rally into the short-term Fibonacci level at .7232, followed closely by the main top at .7248.

Taking out .7248 will change the main trend to up. We could see an acceleration to the upside on the move with .7316 the next major target.

Bearish Scenario

A sustained move under .7206 will signal the presence of sellers. If this move generates enough downside momentum then look for a possible break into the main retracement zone at .7159 to .7123.

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