The New Zealand Dollar edged higher on Wednesday as the prospects of aggressive fiscal stimulus in the United States bolstered the global outlook, while economic data out of Australia remained mostly positive, helping to underpin the Kiwi.
At 09:53 GMT, the NZD/USD is trading .7160, up 0.0043 or +0.60%.
Sentiment was supported by a declaration from Janet Yellen, U.S. President-elect Joe Biden’s nominee for Treasury Secretary, that the government had to “act big” on stimulus.
According to Reuters, a surge in debt-funded spending would be positive for the global economy and commodity prices, while more money-printing could put pressure on the U.S. Dollar.
Commodities saw the benefit with oil prices climbing anew, while an auction of dairy, New Zealand’s biggest export earner, produced a sharp 4.8% rise in prices.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .7096 will signal a resumption of the downtrend. The main trend will change to up on a move through .7240.
The short-term range is .7003 to .7316. The NZD/USD is currently straddling its retracement zone at .7122 to .7160.
The minor range is .7316 to .7096. Its retracement zone at .7206 to .7232 is a potential upside target and resistance zone.
The main range is .6589 to .7316. If the downtrend resumes then its retracement zone at .6952 to .6867 will become the primary downside target area.
Daily Swing Chart Technical Forecast
The early price action suggests the Fibonacci level at .7122 is controlling the direction of the NZD/USD.
A sustained move over .7123 will indicate the presence of buyers. This could trigger a quick move into .7160. Taking out this level could trigger an acceleration to the upside with the next target clustered at .7206, .7232 and .7240.
A sustained move under .7122 will signal the presence of sellers. This could trigger a break into .7096.
Taking out .7096 will reaffirm the downtrend. If this move generates enough downside momentum then look for a possible acceleration into the next main bottom at .7003.
For a look at all of today’s economic events, check out our economic calendar.