NZD/USD Forex Technical Analysis – Taking Out .6349 Changes Main Trend to Up

Based on the early price action and the current price at .6314, the direction of the NZD/USD the rest of the session on Monday is likely to be determined by trader reaction to the 50% level at .6328.
James Hyerczyk
NZD/USD

The New Zealand Dollar is trading flat against the U.S. Dollar early Monday as the currency remains underpinned by fears a weakening U.S. economy could encourage the U.S. Federal Reserve to trim its benchmark interest rate 25-basis points at its October 29-30 policy meeting. Lower rates will make the U.S. Dollar a less-desirable currency.

At 05:53 GMT, the NZD/USD is trading .6314, down 0.0001 or -0.02%.

Last week, the NZD/USD primarily benefitted from Fed speculation and a weaker U.S. Dollar after a string of weaker-than-expected economic data. However, Friday’s solid U.S. Non-Farm Labor report helped dampen but not eliminate the possibility of a Fed rate cut. This is helping to influence today’s early trade.

There are no major reports out of New Zealand or the United States on Monday. However, Fed Chair Powell speaks at 14:00 GMT, which could fuel a volatile response.

Daily NZD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6349 will change the main trend to up. The downtrend will resume if .6204 fails as support.

The minor range is .6204 to .6337. Its 50% level or pivot at .6270 is support.

The short-term range is .6451 to .6204. Its retracement zone at .6328 to .6357 is resistance. This zone stopped the rally on Friday at .6337. A sustained move over the upper or Fibonacci level of the range at .6357 will indicate strength.

Daily NZD/USD (Short-Term)

Daily Technical Forecast

Based on the early price action and the current price at .6314, the direction of the NZD/USD the rest of the session on Monday is likely to be determined by trader reaction to the 50% level at .6328.

Bearish Scenario

A sustained move under .6328 will indicate the presence of sellers. This could trigger a break into the uptrending Gann angle at .6244. Look for a technical bounce on the first test of this angle. If it fails then look for the selling to extend into the pivot at .6270.

Bullish Scenario

A sustained move over .6328 will signal the presence of buyers. Taking out .6337 will indicate the buying is getting stronger. A trade through .6349 will change the main trend to up. This could extend the rally into the Fibonacci level at .6357, followed by the downtrending Gann angle at .6366. This is a potential trigger point for an acceleration to the upside.

Side Notes

The NZD/USD may have to pullback into .6270 before taking another run at .6349.

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