NZD/USD Forex Technical Analysis – Weakens Under .7179, Strengthens Over .7234

The New Zealand Dollar is trading lower late in the session on Friday while attempting to claw back some of its earlier loss. A stronger U.S. Dollar was the source of the weakness. The dollar rose when U.S. Treasury yields spiked higher during the European session.

The subsequent plunge in Treasury bonds was fueled by fears of inflation. Some traders said the move was tied to Present Biden’s signing of the $1.9 trillion coronavirus-relief package. With the economy already recovering, the injection of a massive amount of money could spike inflation higher.

At 19:33 GMT, the NZD/USD is trading at .7178, down 0.0049 or -0.68%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7099 will signal a resumption of the downtrend. The main trend will change to up on a move through .7465.

The minor trend is also down. A trade through .7241 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is .7099 to .7241. The NZD/USD found support when it tested its retracement zone at .7170 to .7153 earlier today.

The main range is .7003 to .7465. Its retracement zone at .7180 to .7234 is resistance. This area is controlling the near-term direction of the Forex pair.

The short-term range is .7465 to .7099. Its retracement zone at .7282 to .7325 is the next potential resistance area.

Short-Term Outlook

The next major move by the NZD/USD will be determined by trader reaction to the Fibonacci level at .7179 and the 50% level at .7234.

Bearish Scenario

A sustained move under .7179 will indicate the presence of sellers. Taking out the retracement zone at .7170 to .7153 will indicate the selling is getting stronger. This could trigger an acceleration to the downside with the next target a potential support cluster at .7099 to .7096.

Bullish Scenario

A sustained move over .7179 will signal the presence of buyers, but overtaking the 50% level at .7234 could trigger an acceleration to the upside with .7282 the next key target.

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