NZD/USD Strengthens Over .6955, Weakens Under .6874

The New Zealand Dollar is trading flat early Monday after reaching its highest level since March 7 earlier in the session. The Kiwi appears to be gearing up for a test of this four month high amid speculation the Reserve Bank (RBNZ) will continue its aggressive pace of rate hikes.

Meanwhile, traders don’t seem to be too intimidated by the hawkish tone of the Federal Reserve last week. This indicates the Fed’s plans to raise rates at subsequent meetings this year have already been priced in.

At 03:55 GMT, the NZD/USD is trading .6907, up 0.0001 or +0.02%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6926 will reaffirm the uptrend. A move through .6729 will change the main trend to down.

The main range is .7219 to .6529. The NZD/USD is currently trading inside its retracement zone at .6874 to .6955. Trader reaction to this zone will determine the near-term direction of the Forex pair.

The minor range is .6729 to .6923. Its 50% level at .6826 is the nearest support. This level will move up as the market moves higher.

The short-term range is .6529 to .6926. Its retracement zone at .6727 to .6681 is the best support. It will also move up as the market moves higher.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Monday will be determined by trader reaction to .6906.

Bullish Scenario

A sustained move over .6906 will indicate the presence of buyers. Taking out .6926 will reaffirm the uptrend. This could create the upside momentum needed to challenge the long-term Fibonacci level at .6955. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .6906 will signal the presence of sellers. The first downside target is the long-term 50% level at .6874. If this fails then look for the selling to possibly extend into the minor pivot at .6826.