Advertisement
Advertisement

NZD/USD Forex Technical Analysis – Weakens Under .6682, Strengthens Over .6706

By:
James Hyerczyk
Published: Apr 27, 2019, 16:52 UTC

Based on Friday’s close at .6656, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the downtrending Gann angle at .6669.

New Zealand Dollars

The New Zealand Dollar rose for a second day on Friday, helping to alleviate some of the technically oversold condition. The initial surge by the Kiwi was fueled by positive domestic macroeconomic data. Statistics New Zealand reported that the trade balance registered a surplus of NZ$922 million in March, which was well above the median forecast of NZ$131 million. The balance showed a deficit of NZ$68 million the previous month.

On Friday, the NZD/USD settled at .6656, up 0.0031 or +0.46%.

A weaker U.S. Dollar also helped boost the Forex pair after an overall strong U.S. first-quarter growth report was overshadowed by soft inflation data.

NZDUSD
Daily NZD/USD

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum shifted to the upside with the formation of a closing price reversal bottom on Thursday and the subsequent confirmation of the chart pattern during yesterday’s session.

A trade through .6580 will negate the chart pattern and signal a resumption of the downtrend. The main trend will actually turn up on a move through .6784.

The short-term range is .6784 to .6580. Its retracement zone at .6682 to .6706 is the first upside target. On Friday, the lower or 50% level at .6682 stopped the rally. Since the main trend is down, sellers are likely to continue to come in on a test of this zone. They will be trying to produce a potentially bearish secondary lower top. Overtaking .6706 will indicate the buying is getting stronger.

The main range is .6939 to .6580. Its retracement zone at .6760 to .6802 is the second upside target. The last main top at .6784 was created inside this zone.

Daily Technical Forecast

Based on Friday’s close at .6656, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the downtrending Gann angle at .6669.

Bullish Scenario

A sustained move over .6669 will indicate the presence of buyers. This could create a labored rally with the next two targets a 50% level at .6682 and a short-term downtrending Gann angle at .6684.

Taking out .6684 could trigger a surge into the short-term Fibonacci level at .6706. This is the trigger point for a potential acceleration into the downtrending Gann angle at .6734.

Bearish Scenario

A sustained move under .6669 will signal the presence of sellers. This could trigger a pullback into the uptrending Gann angle at .6660. This angle held as support on Friday. If it fails then look for the selling to possibly extend into a pair of uptrending Gann angles at .6620 and .6600. The latter is the last potential support angle before the .6580 main bottom.

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.

Did you find this article useful?

Advertisement