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NZD/USD Forex Technical Analysis – Trade Through .7230 Reaffirms Uptrend with .7266 – .7270 Next Target Zone

By:
James Hyerczyk
Published: Apr 26, 2021, 03:03 UTC

The direction of the NZD/USD on Monday is likely to be determined by trader reaction to the main 50% level at .7204.

NZD/USD

In this article:

The New Zealand Dollar is edging higher early Monday on light volume with the country on a bank holiday. Over the past two sessions, investors have overcome two potentially bearish news events putting the currency in a positon to challenge last week’s high.

On Thursday, the Kiwi was weakened after the government said it intended to regulate bank lending standards, traditionally the domain of the Reserve Bank of New Zealand (RBNZ). That same day, the currency was pressured after Bloomberg reported the Biden administration plans to double the capital gains tax for people on incomes of more than $1 million.

At 02:43 GMT, the NZD/USD is trading .7214, up 0.0018 or +0.25%.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7230 will signal a resumption of the uptrend. The main trend will change to down on a move through .7122.

The minor trend is also up. A trade through .7146 will change the minor trend to down. This will also shift momentum to the downside.

The short-term range is .6943 to .7230. Its retracement zone at .7145 to .7106 is support. This zone stopped the selling at .7122 on April 19 and at .7146 on April 22.

The main range is .7465 to .6943. The NZD/USD is currently testing its retracement zone at .7204 to .7266. This zone is controlling the near-term direction of the Forex pair.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Monday is likely to be determined by trader reaction to the main 50% level at .7204.

Bullish Scenario

A sustained move over .7204 will indicate the presence of buyers. Taking out .7230 will reaffirm the uptrend and could create the upside momentum needed to challenge the main Fibonacci level at .7266, followed by the next main top at .7270.

The main top at .7270 is a potential trigger point for an acceleration to the upside. The daily chart indicates there is plenty of room to the upside with the February 25 main top at .7465 the next likely upside target.

Bearish Scenario

A sustained move under .7204 will signal the presence of sellers. This could lead to a labored break with potential support levels lined up at .7146, .7145, .7122 and .7106.

Taking out .7122 will change the main trend to down. A failure to hold .7106 could trigger an acceleration to the downside with .7027 the next likely downside target.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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