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James Hyerczyk
New Zealand Kiwi

The New Zealand Dollar is trading higher on Thursday after the Reserve Bank of New Zealand (RBNZ) announced it would go ahead with plans to increase capital requirements for banks, but offered more time for the lenders to make the changes than originally proposed.

The Kiwi is also being supported by follow-through buying related to yesterday’s weak U.S. economic data and positive news about a U.S.-China trade deal, which drove up demand for higher-yielding assets.

At 01:41 GMT, the NZD/USD is trading .6549, up 0.0019 or +0.30%.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through today’s intraday high at .6562 will signal a resumption of the uptrend.

The main trend will change to down on a trade through the last main bottom at .6395. The trend is safe for now, however, the NZD/USD is up eight sessions from the last main bottom which puts it in the window of time for a potentially bearish closing price reversal top.

This chart pattern won’t change the main trend to down, but it could trigger the start of a 2 to 3 day correction.

The main range is .6791 to .6204. Its retracement zone at .6497 to .6567 is currently being tested. This zone is controlling the longer-term direction of the NZD/USD.


Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6549, the direction of the NZD/USD the rest of the session on Thursday is likely to be determined by trader reaction to yesterday’s close at .6529.

Bullish Scenario

A sustained move over .6529 will indicate the presence of buyers. If this is able to generate enough upside momentum then look for a retest of today’s high at .6562, followed by the main Fibonacci level at .6567.

Taking out .6567 could trigger a surge into the minor top at .6588. This is a potential trigger point for an acceleration to the upside. The daily chart shows there is no visible resistance until the July 19 main top at .6791.

Bearish Scenario

A sustained move under .6529 will put the NZD/USD in a position to post a closing price reversal top. This could trigger an intraday break into the 50% level at .6497. Look for an acceleration to the downside if this level fails as support.

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