James Hyerczyk
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The New Zealand Dollar, which is often traded as a proxy for global growth because it is closely tied to commodities, is recovering from early losses on Thursday. Relatively calm Treasury and global stock markets are helping to generate some positive investor sentiment.

Earlier in the session, Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr emphasized that central banks were deliberately looking to push inflation above target to make up for years of underachieving.

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Traders said that was one reason New Zealand 10-year yields were up at 1.87%, a chunky 39 basis points above Treasuries.

At 07:26 GMT, the NZD/USD is trading .7266, up 0.0020 or +0.27%.

Look for volatility at 17:05 GMT when Fed Chair Jerome Powell speaks.

NZD/USD investors are anxious to see if Powell expresses concern about a recent volatile sell-off in Treasuries and if there is any change in his assessment of the economy before the Fed’s next meeting ending March 17.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower since the formation of the closing price reversal top on February 25.

The main trend will change to down on a trade through .7158. Taking out .7465 will signal a resumption of the uptrend.

The short-term range is .7003 to .7465. Its retracement zone at .7234 to .7179 is support. Traders have been trying to build a support base at .7234 the last five sessions.

The minor range is .7465 to .7209. Its retracement zone at .7337 to .7367 is the primary upside target. Counter-trend sellers could come in on a test of this area.


Daily Swing Chart Technical Forecast

The early price action suggests the direction of the NZD/USD on Thursday will be determined by trader reaction to the main 50% level at .7234.

Bullish Scenario

A sustained move over .7234 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the minor retracement zone at .7337 to .7367.

Bearish Scenario

A sustained move under .7234 will signal the presence of sellers. This could trigger the start of a labored break with potential downside targets coming in at .7209, .7179 and .7158.

Taking out .7158 will change the main trend to down, and this could trigger the start of s steep correction.

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

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