NZD/USD Forex Technical Analysis – Weekly Trend Changes to Up Over .6727 but Watch for Resistance at .6781

The New Zealand Dollar closed higher last week, driven by an easing of tensions over the trade dispute with China and better than expected Gross Domestic Product data. This week, investors will have to deal with renewed concerns over the trade dispute now that China has pulled out of the negotiations until after the November U.S. mid-term elections, a widely expected Fed rate hike and an interest rate decision and monetary policy statement from the Reserve Bank of New Zealand.

Last week, the NZD/USD settled at .6680, up 0.0134 or +2.05%.

Weekly Swing Chart Technical Analysis

The main trend is down according to the weekly swing chart, however, momentum is trending higher with the closing price reversal bottom the week-ending September 14 and the subsequent confirmation last week. This chart pattern typically leads to a 2 to 3 week rally and/or a 50% to 61.8% retracement of the last major swing down.

A trade through .6727 will change the main trend to up. A move through .6500 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The short-term range is .6727 to .6500. Its 50% level or pivot is .6613. Holding above this level will continue to give the NZD/USD an upside bias.

The intermediate range is .7061 to .6500. If the trend changes to up then its retracement zone at .6781 to .6847 will become the primary upside target.

The main range is .7437 to .6500. Its retracement zone at .6969 to .7079 is the major target zone.

Weekly Swing Chart Technical Forecast

Based on last week’s price action and the close at .6680, the direction of the NZD/USD this week is likely to be determined by trader reaction to the 50% level or pivot at .6613.

A sustained move over .6613 will indicate the presence of buyers. If the upside momentum continues then look for the rally to extend into the main top at .6727. Taking out this level will change the main trend to up. This should create the upside momentum to challenge the retracement zone at .6781 to .6847.

Traders have to be careful buying strength over .6827 because of the retracement zone at .6781 to .6847. Sellers may show up in an effort to form a secondary lower top.

A sustained move under .6613 will signal the presence of sellers. This could generate the downside momentum needed to challenge .6500.