NZD/USD Forex Technical Analysis – Trader Reaction to .7027 Sets the Tone, but Low Volume Could Be Problem

The New Zealand Dollar is trading slightly lower early Monday on below average volume as the major players remain on the sidelines due to the bank holiday in the country. Traders are also showing little reaction to the blowout U.S. Non-Farm Payrolls report from Friday, which signaled the economy is heating up, creating a reason for another potential surge in Treasury yields and the U.S. Dollar.

At 02:16 GMT, the NZD/USD is at .7026, down 0.0007 or -0.10%.

Later today at 14:00 GMT, traders will get the opportunity to react to the latest U.S. ISM Services PMI report. It is expected to come in at 58.3, better than last month’s 55.3 reading. Factory Orders are expected to fall 0.5%.

Essentially, the direction of the NZD/USD will be determined by how Treasury investors react to Friday’s jobs report.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Friday when buyers took out the previous main top at .7034. Since the move took place on a low volume day, we’re hoping for further confirmation on a strong breakout over .7048. The main trend will change to down on a trade through .6945. It will be reaffirmed if sellers can take out .6943.

The main retracement zone is .7027 to .6924. This zone is controlling the near-term direction of the NZD/USD. The Forex pair is currently straddling the upper level of this range.

The new minor range is .6943 to .7048. Its 50% level at .6995 is potential support.

The short-term range is .7270 to .6943. Its 50% level at .7107 is the next potential upside target.

Daily Swing Chart Technical Forecast

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

Bullish Scenario

A sustained move over .7027 will indicate the presence of buyers. Taking out .7048 will indicate the buying is getting stronger. This could trigger an acceleration into .7107.

Bearish Scenario

A sustained move under .7027 will signal the presence of sellers. The first downside target is .6995. Buyers could come in on the first test of this level. If it fails then look for an acceleration into .6945 – .6943, followed by .6924.