Advertisement
Advertisement

NZD/USD Forex Technical Analysis – Weekly Chart Strengthens Over .6621, Weakens Under .6597

By:
James Hyerczyk

Based on last week’s price action and the prolonged move down, the direction of the NZD/USD is likely to be determined by trader reaction to the downtrending Gann angle at .6621 and the uptrending Gann angle at .6597.

New Zealand Dollars

The New Zealand Dollar closed higher last week after hitting its lowest level since the week-ending February 19, 2016. The rebound rally was strong enough to produce a closing price reversal bottom on the weekly chart.

For the week, the NZD/USD settled at .6635, up 0.0058 or +0.88%.

Due to the prolonged move down in terms of price and time, the Forex pair began the week in the window of time for a closing price reversal bottom so the formation of the chart pattern came as no surprise. We don’t expect to see a change in trend but we could see a 2 to 3 week counter-trend rally designed to alleviate some of the downside pressure.

Fundamentally, the NZD/USD is facing headwinds from rising U.S. interest rates, a dovish Reserve Bank of Australia and the shedding of risky currencies due to emerging market turmoil.

NZDUSD
Weekly NZD/USD

Weekly Technical Analysis

The main trend is down according to the weekly swing chart, however, momentum is trying to shift to the upside. The main trend will turn up on a move through .7061. A trade through .6544 will negate the reversal bottom and signal a resumption of the downtrend with .6346 the next major target.

The main range is .6207 to .7558. Its retracement zone at .6723 to .6883 is resistance. Holding below this zone is also helping to give it a downside bias.

NZDUSD
Weekly NZDUSD (Close-Up)

Weekly Technical Forecast

Based on last week’s price action and the prolonged move down, the direction of the NZD/USD is likely to be determined by trader reaction to the downtrending Gann angle at .6621 and the uptrending Gann angle at .6597.

A sustained move under .6621 will indicate the presence of sellers. Taking out the uptrending Gann angle at .6597 will indicate the selling is getting stronger. This could trigger an even stronger move into last week’s low at .6544.

The weekly chart is wide open under .6544 with the next targets another long-term uptrending Gann angle at .6402, followed by a main bottom at .6346.

A sustained move over .6621 will signal the presence of counter-trend buyers. If this move gains enough traction then look for the rally to possibly extend into the Fibonacci level at .6723.

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