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NZD/USD Forex Technical Analysis – Trading on Weak Side of Major Retracement Zone

By:
James Hyerczyk
Published: May 12, 2018, 09:35 UTC

Based on Friday’s price action and the close at .6963, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the short-term pivot at .6978.

New Zealand Dollars

The New Zealand Dollar traded higher early in the session on Friday, but ended up settling flat. Earlier in the week, dovish comments from the Reserve Bank of New Zealand (RBNZ), drove the Forex pair to its lowest level since December 11, however, the Kiwi posted a dramatic reversal to the upside on Thursday in reaction to weaker-than-expected U.S. consumer inflation data and increased demand for commodity-linked currencies in reaction to a surge in crude oil prices.

On Friday, the NZD/USD settled at .6963, unchanged for the session.

NZDUSD
Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6902 will signal a resumption of the downtrend. The main trend will change to up on a move through .7053.

The short-term range is .7053 to .6902. Its 50% level or pivot is .6978.

The main range is .6780 to .7437. Its retracement zone at .7031 to .7109 is the next upside target. This zone is controlling the longer-term direction of the Forex pair. It should be considered resistance.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at .6963, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the short-term pivot at .6978.

A sustained move under .6978 will indicate the presence of sellers. If this move creates enough downside momentum, we could see a retest of last week’s low at .6902.

The low at .6902 is the trigger point for a possible acceleration to the downside with potential targets coming in at .6821, .6816 and the November 17 bottom at .6780.

Overtaking and sustaining a move over .6978 will signal the presence of buyers. This could generate the upside momentum needed to challenge the major Fibonacci level at .7031, followed closely by the main top at .7053.

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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