The New Zealand Dollar, which posted its best session in nearly five months yesterday, hit a one week high before retreating on Thursday. This, despite a hawkish decision from the Reserve Bank (RBNZ) to end its bond buying stimulus program next week and dovish comments from Federal Reserve Chairman Jerome Powell on Wednesday that drove down U.S. Treasury yields.
At 09:57 GMT, the NZD/USD is trading .7014, down 0.0024 or -0.33%.
Traders may be reacting to the news that China’s economy grew slightly more slowly than expected in the second quarter, weighed down by higher raw material costs and new COVID-19 outbreaks, as expectations build that policymakers may have to do more to support the recovery.
New global COVID-19 infections could also be weighing on sentiment for riskier assets.
Daily NZD/USDDaily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6917 will signal a resumption of the downtrend. The main trend will change to up on a move through .7105.
The NZD/USD is currently trading inside a major retracement zone at .7027 to .6924. This zone is controlling the longer-term direction of the Forex pair. Inside this trading range is a minor pivot at .6981. This is potential support.
The intermediate range is .7243 to .6917. Its 50% level at .7081 is a potential upside target.
The short-term range is .7316 to .6917. If the main trend changes to up then look for a test of its retracement zone at .7117 to .7164.
Daily Swing Chart Technical Forecast
The direction of the NZD/USD on Thursday is likely to be determined by trader reaction to .7027.
A sustained move over .7027 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into a series of potential resistance levels at .7081, .7105, .7117 and .7164.
A sustained move under .7027 will signal the presence of sellers. The first downside target is the minor pivot at .6981. Look for buyers on a pullback into this level. They are going to try to form a potentially bullish secondary higher bottom.
If .6981 fails as support then look for a sharp break into .6924 to .6917.
The fundamentals have turned bullish, but the NZD/USD may have to pullback into .6981 in order to attract new buyers.
This article was originally posted on FX Empire
More From FXEMPIRE:
Shiba Inu Attempts To Settle Below The Support At $0.000007
GBP/JPY Price Forecast – British Pound Gets Whipsawed by Comments
USD/JPY Price Forecast – The US Dollar Bounces From 50 Day EMA
GBP/USD Price Forecast – British Pound All Over the Place
UnitedHealth Set to Post New Highs
NZD/USD Forex Technical Analysis – Trader Reaction to .7027 Setting Early Tone; .6981 Key Support