NZD/USD Forex Technical Analysis – Sustained Move Under .6735 Puts One-Year Low at .6589 on Radar

The commodity-linked New Zealand Dollar is trading lower late in the session on Tuesday on worries the Omicron coronavirus variant is set to dent the global demand recovery.

News that U.S. producer prices surged to a record high also contributed to a rise in the U.S. Dollar.

The Kiwi was also pressured by expectations that the U.S. Federal Reserve will announce on Wednesday that it will quicken its withdrawal from bond purchases.

At 21:08 GMT, the NZD/USD is trading .6744, down 0.0010 or -0.15%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Tuesday when sellers took out the previous main bottom at .6737. A move through .6823 will change the main trend to up.

The minor range is .6868 to .6735. Its 50% level at .6802 is the nearest resistance.

The second minor range is .7053 to .6735. If the main trend changes to up then its 50% level at .6894 will become the primary upside target.

The short-term range is .7219 to .6735. Its retracement zone at .6977 to .7034 is controlling the near-term direction of the NZD/USD.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD early Wednesday is likely to be determined by trader reaction to .6779.

Bearish Scenario

A sustained move under .6779 will indicate the presence of sellers. Taking out .6735 will indicate the selling pressure is getting stronger. This could trigger the start of an acceleration to the downside with the next major target the November 2, 2020 main bottom at .6589.

Bullish Scenario

A sustained move over .6779 will signal the presence of buyers. If this creates enough upside momentum then look for a surge into the pivot at .6802.

Look for sellers on the first test of .6802. Overcoming this level, however, will indicate the buying is getting stronger. This could trigger a surge into the main top at .6823. Taking out this level will change the main trend to up.