NZD/USD Forex Technical Analysis – Trader Reaction to .6655 Sets the Tone

The New Zealand Dollar is edging higher on Monday as investors awaited news about U.S. President Donald Trump’s possible release from the hospital after he tested positive for coronavirus late Thursday. Traders are also holding out hope that the U.S. would pass a stimulus bill after U.S. House Speaker Nancy Pelosi on Sunday said progress was being made on coronavirus relief legislation.

At 03:41 GMT, the NZD/USD is trading .6649, up 0.0012 or +0.18%.

In other news, coronavirus restrictions in New Zealand’s largest city will be lifted this week, Prime Minister Jacinda Ardern said on Monday as she expressed confidence a second wave of COVID-19 infections in Auckland has been almost eliminated.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6512 will signal a resumption of the downtrend. A move through .6798 will change the main trend to up.

The main support is a retracement zone at .6589 to .6540. The NZD/USD formed a support base inside this area in late September.

The short-term range is .6798 to .6512. Its retracement zone at .6655 to .6689 has been providing resistance the past three sessions. Trader reaction to this zone is likely to determine the near-term direction of the NZD/USD.

Daily Swing Chart Technical Forecast

Based on the price action the last three sessions, the direction of the NZD/USD is likely to be determined by trader reaction to the short-term 50% level at .6655.

Bullish Scenario

A sustained move over .6655 will indicate the presence of buyers. If this move can generate enough upside momentum then look for the rally to extend into the Fibonacci level at .6689.

Bearish Scenario

A sustained move under .6655 will signal the presence of sellers. The first downside target is a pair of lows at .6613. If this level fails then look for the selling to possibly extend into the main 50% level at .6589.

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