NZD/USD Forex Technical Analysis – Upside Momentum Targets .6939
The New Zealand Dollar is trading at an eighteen month high on Wednesday and bond yields climbed as markets pared back the chance of negative interest rates in the country. The Kiwi surged to a level not seen since March 2019 after the country’s central bank launched a new funding facility and reiterated its commitment to keep the cash rate at 0.25% until March 2021.
At 07:09 GMT, the NZD/USD is trading .6895, up 0.0064 or +0.94%.
At a news conference, Governor Adrian Orr said that it was “too early to tell” if the possibility of negative rates had now decreased. Still he left the door ajar for further stimulus given the unemployment rate was expected to rise from 5.3% now and inflation was projected to undershoot the RBNZ’s target range.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend resumed earlier today when buyers took out Monday’s high at .6855.
A trade through .6589 will change the main trend to down. This is highly unlikely, however, due to the seven day rally from the last main bottom, the NZD/USD has entered the window of time for a closing price reversal top.
The minor range is .6589 to .6904. This makes its 50% level at .6746 a potential downside target and support. This level will move up if .6904 is taken out.
The main range is .6512 to .6904. Its retracement zone at .6708 to .6662 is a potential downside target zone. It will also move up with each higher-high.
Daily Swing Chart Technical Forecast
Given the prolonged move up in terms of price and time, the direction of the NZD/USD will be determined by trader reaction to Tuesday’s close at .6831.
A sustained move over .6831 will indicate the presence of buyers. This could create the upside momentum needed to challenge the March 21 main top at .6939. We could see profit-taking on the first test of this level, but keep in mind, it’s also the trigger point for an acceleration to the upside.
A sustained move under .6831 will signal the presence of sellers. This will put the NZD/USD in a position to form a potentially bearish closing price reversal top.