Rangebound New Zealand Dollar Strengthens Over .6785, Weakens Under .6761

The New Zealand Dollar is trading flat early Tuesday and remained rangebound for a third session as speculators appear to be worried the Federal Reserve’s increasingly hawkish outlook for U.S. interest rates will overshadow the Reserve Bank of New Zealand’s (RBNZ) hawkish tone.

At 06:07 GMT, the NZD/USD is trading .6762, up 0.0002 or +0.03%.

The NZD/USD is hovering near a three-week low amid increasing hawkishness from Fed policy makers, but has been stuck in a range the last three days.

Gains are being capped by a continued ramping up of rhetoric that now has Wall Street banks forecasting four quarter-point rate hikes this year. Perhaps helping to underpin prices is a report showing Australian retail sales came in much higher than economists forecast.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6733 will signal a resumption of the downtrend. A move through .6857 will change the main trend to up.

The minor trend is also down. A trade through .6837 will change the minor trend to up. This will also shift momentum to the upside.

The NZD/USD is currently trading inside a pair of retracement levels at .6761 and .6785. This area is controlling the short-term direction of the Forex pair.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Tuesday is likely to be determined by trader reaction to .6785 and .6761.

Bullish Scenario

A sustained move over .6785 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into a minor pivot at .6795.

Sellers could come in on the first test of .6795, but overcoming it could trigger a surge into the minor top at .6837, followed closely by the main top at .6857.

Bearish Scenario

A sustained move under .6761 will signal the presence of sellers. This could generate the momentum needed to challenge last week’s low at .6733. Taking it out could expand the selling pressure into .6702.