James Hyerczyk
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The New Zealand Dollar is edging higher early Monday on relatively low volume after finding support inside a short-term retracement zone the previous session. The Kiwi closed lower last week despite a drop in U.S. Treasury yields as investors piled into the U.S. Dollar ahead of key monetary policy announcements from the U.S. Federal Reserve on Wednesday.

At 05:58 GMT, the NZD/USD is trading .7146, up 0.0019 or +0.26%.

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On Thursday, traders will get the chance to respond to the latest New Zealand GDP figures. Traders are pricing in a 0.5% gain versus a -1.0% previous read.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7115 will reaffirm the downtrend. A trade through .7316 will change the main trend to up. This is highly unlikely, but do to the prolonged move down in terms of price and time since the last main top on May 26, the NZD/USD may be ripe for a closing price reversal bottom.

The minor trend is also down. A trade through .7243 will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is .6943 to .7316. Its retracement zone at .7129 to .7085 stopped the selling at .7116 on June 11.

The main range is .7465 to .6943. Its retracement zone at .7204 to .7266 is resistance. The lower or 50% level at .7204 stopped the buying three times last week.


Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Monday is likely to be determined by trader reaction to the short-term 50% level at .7129.

Bullish Scenario

A sustained move over .7130 will indicate the presence of buyers. If this move is able to drive up the momentum this week then look for the rally to extend into the main 50% level at .7204.

Bearish Scenario

A sustained move under .7129 will signal the presence of sellers. Taking out the next main bottom at .7115 will indicate the selling is getting stronger with the short-term Fibonacci level at .7085 the next target. This is a potential trigger point for an acceleration to the downside with .7027 another target.

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