NZD/USD Forex Technical Analysis – Trading on Weakside of Main 50% Level at .7204

The New Zealand Dollar is inching higher early Monday following the release of better-than-expected domestic retail sales data, however, prices remain in a range for a third session with traders waiting for the next catalyst to drive the next major move.

At 0:31 GMT, the NZD/USD is trading .7171, up 0.0007 or +0.10%.

In economic news, New Zealand retail sales volumes rose a seasonally adjusted 2.5 percent in the first quarter, data from Statistics New Zealand showed on Monday, putting sales 6.8 percent higher on the year.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum has been trending lower since May 10.

A trade through .7135 will change the main trend to down. This is followed by another main bottom at .7115. A move through .7305 will signal a resumption of the uptrend.

The minor trend is also up. A trade through the minor top at .7271 will indicate the buying is getting stronger.

The main range is .7465 to .6943. Its retracement zone at .7204 to .7266 is resistance. This zone is controlling the near-term direction of the Forex pair.

The short-term range is .6943 to .7305. Its retracement zone at .7124 to .7081 is potential support.

Daily Swing Chart Technical Forecast

The price action the last few days suggests the direction of the NZD/USD on Monday will be determined by trader reaction to the main 50% level at .7204.

Bearish Scenario

A sustained move under .7204 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main bottom at .7135. If this fails to hold then look for the move to continue into .7124 to .7115.

Bullish Scenario

A sustained move over .7204 will signal the presence of buyers. The daily chart indicates there is plenty of room to the upside over this level with potential targets the main Fibonacci level at .7266, followed by the minor top at .7271.

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