NZD/USD Weakens Under .6937, Strengthens Over .6956

The New Zealand Dollar is trading lower on Thursday on monthly and quarterly profit-taking and position-squaring. The price action suggests bullish traders seem content with consolidating hefty gains as commodity prices remained high, and bond yields even higher. Lower crude oil prices could also be weighing on the currency.

The Kiwi touched a four-month high at .6999 the previous session. That move put it nearly 3.0% higher for the month and within striking distance of a pair of November 2021 main tops at .7053 and .7081.

At 12:21 GMT, the NZD/USD is trading .6935, down 0.0042 or -0.60%.

There were no major domestic reports on Thursday, but investors will get the opportunity to react to a slew of U.S. economic data including Core PCE Price Index, Weekly Unemployment Claims, Personal Income and Personal Spending. They could have some influence on U.S. Treasury yields.

Also on Thursday, the commodity-sensitive New Zealand Dollar could be driven by volatility in the crude oil market. The bearish theme is being fueled by the release of oil from the U.S. Strategic Petroleum Reserve (SPR).

Later today, U.S. President Joe Biden is expected to give remarks regarding his administration’s actions aimed at lowering gasoline prices that have risen to records following Russia’s invasion of Ukraine.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6999 will signal a resumption of the uptrend. A move through .6876 will change the main trend to down.

The main major range is .7219 to .6529. The NZD/USD is currently trading inside its retracement zone at .6874 to .6955.

The minor range is .6876 to .6999. Its pivot at .6937 is currently being tested.

The short-term range is .6529 to .6999. If the main trend changes to down then its retracement zone at .6746 to .6708 will become the primary downside target.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Thursday is likely to be determined by trader reaction to .6937.

Bearish Scenario

A sustained move under .6937 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the support cluster at .6876 – .6874.

Bullish Scenario

A sustained move over .6937 will signal the presence of buyers. Overtaking the major Fibonacci level at .6955 will indicate the buying is getting stronger. If this generates enough upside momentum then look for a surge into .6999.

Overtaking .6999 will indicate the buying is getting stronger with .7053 the first major upside target.