NZD/USD Forex Technical Analysis – Building Rising Support Base Ahead of Anticipated RBNZ Rate Hike

The New Zealand Dollar is trading higher late in the session on Friday after the U.S. 10-year Treasury yield dipped below 1.3%, following a report from the University of Michigan that showed U.S. consumer sentiment plummeted to its lowest level since December 2011. The lower yield dampened the U.S. Dollar’s investment appeal.

At 20:27 GMT, the NZD/USD is trading .7040, up 0.0038 or +0.55%.

U.S. consumer confidence fell in August to its lowest level since 2011, as fears about the delta variant and the reopening of the economy continued to spread. The consumer sentiment index fell 13% from the July reading to 70.2, the University of Michigan reported Friday. Economists surveyed by Dow Jones expected a reading of 81.3 for August.

The New Zealand Dollar was supported as worries over an early Fed tapering eased ahead of an anticipated rate hike by the Reserve Bank of New Zealand (RBNZ) on August 18. The RBNZ is expected next Wednesday to be among the first of the world’s advanced economies to raise interest rates in the pandemic era as its recovery continues to run red-hot.

Daily NZD/USDDaily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .7089 will signal a resumption of the uptrend. A move through .6902 will change the main trend to down.

The minor trend is also up. A trade through .6969 will change the minor trend to down. This will shift momentum to the downside.

The NZD/USD is in a position to close on the strong side of a pivot at .7027, making it support. Additional support levels come in at .6985, .6960 and .6924.

Resistance is a short-term retracement zone at .7099 to .7150.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD into the close on Friday will be determined by trader reaction to the 50% level at .7027.

Bullish Scenario

A sustained move over .7027 will indicate the presence of buyers. Taking out .7062 will reaffirm the minor trend. This would indicate that momentum is increasing. This could create the upside momentum needed to challenge the main top at .7089.

Story continuesBearish Scenario

A sustained move under .7027 will signal the presence of sellers. This could lead to a labored break into the series of retracement levels at .6985, .6960 and .6924.

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

This article was originally posted on FX Empire