NZD/USD Forex Technical Analysis – Weak U.S. Data Could Drive Kiwi Pair into .6324 to .6328

The New Zealand Dollar is edging higher early Thursday in response to better-than-expected Australian labor market data. Concerns over U.S.-China trade relations are helping to keep a lid on the rally, however, while the Forex pair is being underpinned by worries over the U.S. economy, and the increasing probability of a U.S. Federal Reserve rate cut at the end of the month.

At 00:52, the NZD/USD is trading .6294, up 0.0004 or +0.06%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The main trend will change to up on a trade through .6354. A move through .6241 will signal a resumption of the downtrend.

The minor trend is also down. A trade through .6320 will change the minor trend to up. This will shift momentum to the upside.

The short-term range is .6204 to .6354. Its retracement zone at .6279 to .6261 is potential support. This zone was straddled on Wednesday.

The intermediate range is .6451 to .6204. Its retracement zone at .6328 to .6357 is potential resistance. This zone stopped the rally at .6354 on October 11.

Daily Technical Forecast

Based on the early price action and the current price at .6294, the direction of the NZD/USD on Thursday is likely to be determined by trader reaction to the short-term 50% level at .6279.

Bullish Scenario

Holding above .6279 will indicate the presence of buyers. If this move creates enough upside momentum then look for a rally into the price cluster formed by an uptrending Gann angle at .6324, a downtrending Gann angle at .6326 and a 50% level at .6328.

Since the main trend is down, sellers are likely to come in on a test of .6324 to .6328. Overcoming .6328, however, could trigger an acceleration into .6354 to .6357.

Bearish Scenario

A sustained move under .6279 will signal the presence of sellers. This could trigger a break into a potential support cluster at .6264 to .6261. The latter is a potential trigger point for an acceleration into yesterday’s low at .6241, followed by an uptrending Gann angle at .6234. This is the last potential support angle before the .6204 main bottom.

Side Notes

Later in the session at 12:30 GMT, traders will get a chance to respond to the Philly Fed Manufacturing Index, U.S. Building Permits, Housing Starts and Weekly Unemployment Claims.

Weaker-than-expected data will likely solidify the chances of a Fed rate cut at the end of October. This should weaken the greenback and send the NZD/USD higher.