NZD/USD Forex Technical Analysis – Daily Trend Down, .6544 Next
Lower demand for higher risk currencies helped drive the New Zealand Dollar lower on Friday. Investors concerned about U.S. trade disputes with China, Canada and the European Union sent investors scurrying into the safe haven U.S. Dollar, helping to make the Kiwi dollar a less-desirable investment.
At 1951 GMT, the NZD/USD is trading .6618, down 0.0025 or -0.38%. The Forex pair is also in a position to finish the week and the month sharply lower.
Daily Technical Analysis
The main trend is down according to the daily swing chart. It turned down earlier on Friday after sellers took out the last swing bottom at .6621. Earlier in the week, the NZD/USD turned the main trend to up, but that proved to be a false signal when sellers stopped the breakout following a test of a key retracement zone.
The main range is .6544 to .6727. Its retracement zone at .6636 to .6614 is controlling the near-term direction of the market. Currently, the NZD/USD is trading inside this zone. Trader reaction to this zone should set the tone of the market next week.
Daily Technical Forecast
Based on the current price at .6618 and the earlier price action, the direction of the NZD/USD into the close is likely to be determined by trader reaction to the Fibonacci level at .6614.
Holding above .6614 into the close will represent short-covering, position-squaring and profit-taking ahead of the long U.S. holiday weekend.
Taking out .6614 into the close will indicate that short-sellers aren’t afraid to sell weakness ahead of the Labor Day holiday. This will put the NZD/USD in a position to open weaker next week. The next uptrending Gann angle comes in at .6604.
If the angle currently at .6604 fails as support then look for another acceleration to the downside with the next target angle coming in at .6574. This is the last potential support angle before the .6544 main bottom.
Not only are traders worried about the trade wars escalating, but expectations of additional rate hikes by the Fed are also widening the interest rate differential between U.S. Government bonds and New Zealand government bonds. This is bearish for the NZD/USD.
With the Fed hawkish and the Reserve Bank of New Zealand dovish, the best strategy is to continue to sell rallies since they are probably short-covering rather than buying.
At 1951 GMT, the NZD/USD is trading .6618, down 0.0025 or -0.38%. The Forex pair is also in a position to finish the week and the month sharply lower.
Daily Technical Analysis
The main trend is down according to the daily swing chart. It turned down earlier on Friday after sellers took out the last swing bottom at .6621. Earlier in the week, the NZD/USD turned the main trend to up, but that proved to be a false signal when sellers stopped the breakout following a test of a key retracement zone.
The main range is .6544 to .6727. Its retracement zone at .6636 to .6614 is controlling the near-term direction of the market. Currently, the NZD/USD is trading inside this zone. Trader reaction to this zone should set the tone of the market next week.
Daily Technical Forecast
Based on the current price at .6618 and the earlier price action, the direction of the NZD/USD into the close is likely to be determined by trader reaction to the Fibonacci level at .6614.
Holding above .6614 into the close will represent short-covering, position-squaring and profit-taking ahead of the long U.S. holiday weekend.
Taking out .6614 into the close will indicate that short-sellers aren’t afraid to sell weakness ahead of the Labor Day holiday. This will put the NZD/USD in a position to open weaker next week. The next uptrending Gann angle comes in at .6604.
If the angle currently at .6604 fails as support then look for another acceleration to the downside with the next target angle coming in at .6574. This is the last potential support angle before the .6544 main bottom.
Not only are traders worried about the trade wars escalating, but expectations of additional rate hikes by the Fed are also widening the interest rate differential between U.S. Government bonds and New Zealand government bonds. This is bearish for the NZD/USD.
With the Fed hawkish and the Reserve Bank of New Zealand dovish, the best strategy is to continue to sell rallies since they are probably short-covering rather than buying.
