NZD/USD Strengthens Over .6684, Weakens Under .6590

The New Zealand Dollar is trading mixed on Tuesday after giving up all of its earlier gains. A rise in U.S. Treasury yields and a stronger U.S. Dollar helped cap the Kiwi’s gains. Bullish traders are trying to build on Monday’s better performance that was fueled by an improved tone in global equity markets and strength in commodity prices.

At 07:27 GMT, the NZD/USD is trading .6633, down 0.0001 or -0.01%.

The light volume suggests traders are keeping their powder dry ahead of Thursday’s U.S. Consumer Price Index (CPI) for January that is crucial for the Federal Reserve’s tapering timeline. A large increase in consumer inflation is likely to put pressure on policymakers to aggressively tighten.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6891 will change the main trend to up. A move through .6529 will signal a resumption of the downtrend.

The minor trend is also down. A trade through .6684 will change the minor trend to up. This will also shift momentum to the upside.

The first minor range is .6684 to .6590. The NZD/USD is currently straddling its pivot at .6637.

The second minor range is .6529 to .6684. Its retracement zone at .6606 to .6588 is a potential support area.

On the upside, the first minor resistance is a pivot at .6670. The short-term range is .6891 to .6529. If the minor trend changes to up then look for a test of its retracement zone at .6710 to .6753.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Tuesday is likely to be determined by trader reaction to .6637.

Bearish Scenario

A sustained move under .6637 will indicate the presence of sellers. If this creates enough downside momentum then look for the break to extend into .6606 to .6588.

Taking out .6588 could trigger an acceleration to the downside with .6529 the next likely target.

Bullish Scenario

A sustained move over .6637 will signal the presence of buyers. This could trigger a move into .6670, followed closely by .6684.

Taking out .6684 will shift momentum to the upside. This could fuel a further rally into the retracement zone at .6710 to .6753.