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NZD/USD Forex Technical Analysis – Trader Reaction to .7027 Pivot Sets the Tone

By:
James Hyerczyk
Updated: Aug 30, 2021, 05:29 UTC

The direction of the NZD/USD on Monday is likely to be determined by trader reaction to the 50% level at .7027.

NZD/USD

In this article:

The New Zealand Dollar is inching lower on Monday while hovering around Friday’s high at .7019. It’s still early in the session, but the lack of follow-through to the upside following the previous session’s surge suggests investor indecision and another round of volatility.

At 04:57 GMT, the NZD/USD is trading .7001, down 0.0011 or -0.15%.

Helping to underpin the Kiwi is a dip in Treasury yields and a weaker U.S. Dollar. Both have been under pressure since Friday after Fed Chair Jerome Powell said the U.S. central bank could start by year’s end, which was not as fast as many in the financial market had assumed.

Gains are likely being capped by concerns over the economy after New Zealand Prime Minister Jacinda Ardern announced that a lockdown against COVID-19 in Auckland is likely to remain in place for another two weeks.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum has been trending higher since the formation of the closing price reversal bottom on August 20.

A trade through .7089 will change the main trend to up. A move through .6806 will signal a resumption of the downtrend.

On the upside, potential resistance is layered at .7027, .7093 and .7146. On the downside, support is a pair of retracement levels at .6947 and .6924.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Monday is likely to be determined by trader reaction to the 50% level at .7027.

Bullish Scenario

A sustained move over .7027 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the minor top at .7062, followed by the main top at .7089 and the retracement zone at .7093 to .7146.

Bearish Scenario

A sustained move under .7027 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into .6947 to .6924. The latter is a potential trigger point for an acceleration to the downside.

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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