NZD/USD Forex Technical Analysis – Testing Key Retracement Zone; Strengthens Over .6833, Weakens Under .6805

The NZD/USD is trading slightly lower early Wednesday, shortly before the release of a key labor market report. Quarterly Employment Change is expected to come in up 0.4%. The Unemployment Rate is expected to remain at 4.4% and the Labor Cost Index is expected to rise from 0.3% to 0.6%.

The New Zealand Dollar closed higher on Tuesday after a report said that the U.S. and China were trying to restart negotiations to defuse a trade war. This news fueled a rally in the Chinese Yuan against the U.S. Dollar.

In other news, data showed U.S. consumer spending increased solidly in June, while inflation rose moderately. Other data showed employers boosting benefits for workers in the second quarter, but wage growth slowed.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is down due to the closing price reversal top formed at .6851 on July 26.

A trade through .6851 will negate the closing price reversal top and signal a resumption of the uptrend.

The minor trend is down. It changes to up on a move through .6851. A move through .6762 will indicate the selling is getting stronger.

Daily Swing Chart Technical Forecast

Based on Tuesday’s price action, the direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to the Fibonacci level at .6833 and the 50% level at .6805.

A sustained move over .6833 will indicate the presence of buyers. This could drive the NZD/USD into .6851, followed by .6859. The latter is the trigger point for an acceleration to the upside. The daily chart shows there is room to run with .6922 the next major target.

A sustained move under .6805 will signal the presence of sellers. This could lead to a steep break into .6773 then .6766 and .6762.