NZD/USD Forex Technical Analysis – Retracement Zone at .7204 to .7266 Controlling Near-Term Direction

The New Zealand Dollar is trading nearly flat on Wednesday after falling earlier in the session in sympathy with a weaker Australian Dollar. The Aussie broke after the country’s consumer price index came in weaker than expected.

The Kiwi Dollar is likely being capped by uncertainty ahead of the Federal Reserve’s monetary policy announcements at 18:00 GMT and firmer U.S. Treasury yields.

At 05:16 GMT, the NZD/USD is trading .7209, down 0.0001 or -0.01%.

The Fed is not expected to announce any changes to its policy but investors will be keeping a close eye on comments from Fed Chairman Jerome Powell, in a press conference following the meeting. Powell’s message is expected to be dovish, but it has been telegraphed to the Forex market for weeks, so there may be a limited response to the news.


Daily Swing Chart Technical Analysis

The main trend is up. A trade through .7243 will signal a resumption of the uptrend. The main trend will change to down on a trade through .7146.

The main range is .7465 to .6943. Its resistance zone at .7204 to .7266 is resistance. The NZD/USD is currently testing the lower or 50% level at .7204. This zone is controlling the near-term direction of the Forex pair.

The short-term range is .6943 to .7243. If the main trend changes to down then its retracement zone at .7093 to .7058 will become the primary downside target.

The major support is the .7027 to .6924 retracement zone.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to the main 50% level at .7204.

Bearish Scenario

A sustained move under .7204 will indicate the presence of sellers. The first down side target is a minor pivot at .7195. If this level fails then look for the selling to possibly extend into the first main bottom at .7146.

Taking out .7146 will change the main trend to down. This could trigger a quick break into the next main bottom at .7122. Taking out this level will reaffirm the downtrend with the short-term retracement zone at .7093 to .7058 the next likely target. Aggressive counter-trend buyers could come in on a test of this area.

Bullish Scenario

A sustained move over .7204 will signal the presence of buyers. If this move creates enough upside momentum then look for a labored rally with potential resistance targets coming in at .7243, .7266 and .7270.

The main top at .7270 is a potential trigger point for an acceleration to the upside. The daily chart shows there is plenty of room to the upside with .7465 the next major upside target.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.