NZD / USD Forex Technical Analysis – Potentially Bullish Trend Change Places 0.6878 Pivot On The Radar

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The New Zealand dollar edged higher on Thursday as investors downplayed the impact on the global economy of the Omicron coronavirus variant, leading to increased demand for higher-yielding currencies.

With the economic damage from Omicron easing, the New Zealand dollar could benefit from further momentum if the Reserve Bank of New Zealand (RBNZ) reverses its aggressive interest rate hike path.

On Thursday, the NZD / USD stood at 0.6825, up 0.0013 or + 0.19%.

The RBNZ has already risen twice to 0.75% and is expected to drop significantly to 1.0% at its February 23 political meeting. Four more hikes are then planned by October of next year.

NZD / USD daily

Technical analysis of the daily swing chart

The main trend is upward on the daily swing chart. For the second time this month, the NZD / USD changed the main trend upward. The first trend change was probably fueled by short covers. He failed at .6834. The second trend change came on Thursday when buyers pulled down .6834, leading to a test of .6841.

The short-term range is 0.6868 to 0.6702. The NZD / USD is currently trading on the strong side of its 50% level at 0.6785, making it a potential support.

The middle range is 0.7053 to 0.6702. Its 50% level at 0.6878 is the next likely target on the upside.

We might see sellers on the first test of 0.6878, but breaking it could trigger an upward acceleration with the next target a major retracement area at 0.6961 to 0.7022.

Short term outlook

The pivot closing at 0.6785 on Thursday may have created enough bullish momentum to continue the rally in the near term.

Our first target is a potential resistance group formed by the main high at 0.6868 and the 50% level at 0.6878. Watch for vendors when testing this area for the first time.

Look for a strong bullish bias to develop on a sustained move above 0.6878. This can create enough bullish momentum to trigger an acceleration of at least 0.6961.

Failure to overcome .6878 will indicate the sellers return. If this move creates enough downward momentum, look for the 0.6785 test. Failure at this price will be a sign of weakness, but keep in mind that a pullback in this area could also be attractive to buyers, so be careful selling weakness.

Basically expect the bullish momentum to continue as long as 0.6785 is held as support. And for it to increase if buyers can overcome 0.6878.

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