NZD/USD Weakens Under .6702, Strengthens Over .6713
The New Zealand Dollar is inching lower early Monday, putting it on the brink of breaking serious support that could trigger a plunge to its lowest level since November 2020.
The Kiwi is being pressured by global risk aversion as most equity markets continued to sell-off ahead of Wednesday’s major U.S. Federal Reserve decisions.
At 07:07 GMT, the NZD/USD is trading .6706, down 0.0007 or -0.11%.
Kiwi traders are focusing on an Australian consumer inflation report, due to be released Tuesday, that could set the stage for an earlier than expected rate hike by the Reserve Bank of Australia (RBA). The Fed’s policy meeting is also of interest since officials could announce a rate hike for March.
The Reserve Bank of New Zealand (RBNZ) is well ahead of the game having already hiked twice and fully expected to move again at its meeting on February 23.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. It turned down earlier today when sellers took out the main bottom at .6733. A trade through .6891 will change the main trend to up.
The minor trend is also down. A trade through .6811 will change the minor trend to up. This will shift momentum to the upside.
Today’s session begins with the NZD/USD down seven sessions from its last main top, which puts it inside the window of time for a potentially bullish closing price reversal bottom.
Daily Swing Chart Technical Forecast
The direction of the NZD/USD on Monday is likely to be determined by trader reaction to .6713.
A sustained move under .6713 will indicate the presence of sellers. The first downside target is the December 15 main bottom at .6702.
Taking out .6702 will indicate the selling pressure is getting stronger. This could trigger the start of an acceleration to the downside with the November 2, 2020 main bottom at .6589 the next major target.
A sustained move over .6713 will signal the presence of buyers. If this move creates enough upside momentum then look for an intraday retracement into .6756.
The key level to watch is .6702 since this is a potential trigger point for an acceleration to the downside.
Traders should also watch .6713. A close above this level could trigger the start of a 2-3 day short-covering rally.