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NZD/USD Forex Technical Analysis – Struggling after Traders Lowered Rate Hike Expectations

By:
James Hyerczyk
Updated: Jan 27, 2023, 10:26 GMT+00:00

Futures now heavily favor a half-point hike to 4.75%, rather than a move of 75 bps, and have lowered the likely top for rates to 5.25% from 5.5%.

NZD/USD

In this article:

The New Zealand Dollar is trading flat on Friday with traders still debating whether the Reserve Bank of New Zealand (RBNZ) will raise rates 50 or 75 basis points at its February policy meeting. The odds seem to have shifted toward the smaller rate hike after inflation proved less alarming than feared.

At 09:30 GMT, the NZD/USD is trading .6486, down 0.0004 or -0.07%.

Futures now heavily favor a half-point hike to 4.75%, rather than a move of 75 basis points, and have lowered the likely top for rates to 5.25% from 5.5%.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6530 will signal a resumption of the uptrend. A move through .6191 will change the main trend to down.

The minor trend is also up. A trade through .6449 will change the minor trend to down. This will shift momentum to the downside.

The NZD/USD is trading on the strong side of its major Fibonacci level at .6467, followed by a minor pivot at .6445.

On the upside, the major target is the June 3 main top at .6576.

Daily Swing Chart Technical Forecast

Trader reaction to .6486 is likely to determine the direction of the NZD/USD on Friday.

Bullish Scenario

A sustained move over .6486 will indicate the presence of buyers. If this generates enough upside momentum then look for a test of .6524 – .6530. The latter is a potential trigger point for an acceleration to the upside with .6576 the next major target.

Bearish Scenario

A sustained move under .6486 will signal the presence of sellers. This could lead to a labored break with the next potential support a 50% level at .6467 and a support cluster at .6449 – .6445.

The daily chart indicates that taking out .6445 could trigger an acceleration to the downside with another support cluster at .6366 – .6360 the next target area.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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