The New Zealand Dollar is inching lower early Tuesday in a meaningless move probably related to nervous investors trimming long positions. Yesterday, the currency was supported by demand for higher risk assets as progress toward both a coronavirus vaccine and a fiscal rescue package in Europe put the U.S. Dollar under pressure.
At 04:37 GMT, the NZD/USD is trading .6564, down 0.0012 or -0.18%.
Fundamentally, encouraging data from trials of three potential COVID-19 vaccines supported sentiment on Monday and weighed broadly on the safe-have greenback. Meanwhile, speculators feel that an agreement in Europe on the economic recovery fund will improve the global economic outlook while increasing demand for commodity-linked currencies.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through .6601 will signal a resumption of the uptrend. The main trend will change to down on a move through .6503.
The minor trend is also up. A trade through .6528 will change the minor trend to down. This will also shift momentum to the downside. Earlier today, the NZD/USD took out the minor top at .6584, but move back under it.
The minor range is .6601 to .6503. Its 50% level or pivot at .6552 is support. This level is controlling the near-term direction of the NZD/USD.
The short-term range is .6381 to .6601. Its 50% level at .6491 is also potential support. But it’s also the trigger point for a potential acceleration to the downside.
Daily Swing Chart Technical Forecast
Based on the early price action and the current price at .6564, the direction of the NZD/USD the rest of the session on Tuesday is likely to be determined by trader reaction to the pivot at .6552.
A sustained move over .6552 will indicate the presence of buyers. This could lead to a retest of the intraday high at .6589, followed by the main top at .6601. Taking out this level is likely to trigger an acceleration to the upside with the next major targets .6758 and .6791.
A sustained move under .6552 will signal the presence of sellers. If this creates enough downside momentum then look for the selling pressure to possibly extend into the main bottom at .6503, followed by the short-term 50% level at .6491.
For a look at all of today’s economic events, check out our economic calendar.