NZD/USD Forex Technical Analysis – Weakens Under .7204, Strengthens Over .7266

The New Zealand Dollar is being pressured early Wednesday by lower demand for risky assets and a rise in global yields. Also weighing on the Kiwi is a dip in commodity prices. The currency is also falling in sympathy with a lower Australian Dollar, which fell on concerns over iron ore prices and the possibility of increased government debt.

At 08:26 GMT, the NZD/USD is trading .7234, down 0.0035 or -0.48%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of a potentially bearish closing price reversal top on Monday and its subsequent confirmation on Tuesday.

A trade through .7305 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through .7115.

The main range is .7465 to .6943. The NZD/USD is currently trading inside its retracement zone at .7204 to .7266. This zone is also controlling the near-term direction of the Forex pair.

The short-term range is .6943 to .7305. If the selling pressure gains traction then its retracement zone at .7124 to .7081 will become the primary downside target area.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD the rest of the session on Wednesday is likely to be determined by trader reaction to the main Fibonacci level at .7266.

Bearish Scenario

A sustained move under .7266 will indicate the presence of sellers. The first downside target is the main 50% level at .7204. We could see a technical bounce on the first test of this level.

A failure to hold .7204 could create the downside momentum needed to eventually challenge the short-term retracement zone at .7124 to .7081. Inside this zone is the last main bottom at .7115.

Bullish Scenario

A sustained move over .7266 will signal the presence of buyers. This could create the upside momentum needed to breakout over the main top at .7305. This price is a potential trigger point for an acceleration to the upside with .7465 the next major upside target.