NZD/USD Forex Technical Analysis – Strengthens Over .6516, Weakens Under .6494
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The New Zealand Dollar settled slightly lower on Friday after clawing back all of its earlier losses following a spike to the downside. The early selling was fueled by another steep drop in global equity prices. The reversal by the Kiwi was related to the U.S. GDP report which showed the Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) price index excluding food and energy, missing expectations after it increased 1.6 percent in the third quarter.
The NZD/USD settled at .6521 down 0.0001 or -0.01%.
The core PCE price index rose at a 2.1 percent pace in the April-June period. Weak inflation data may cause the Fed to pause the pace of its planned interest rate hikes, which would make the U.S. Dollar a less-desirable asset.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. It turned down earlier in the week when sellers took out the main bottom at .6525. A trade through .6607 will change the main trend to up.
A trade through Friday’s low at .6465 will signal a resumption of the downtrend. This could lead to an eventual test of the next main bottom at .6424.
The minor range is .6424 to .6607. Its retracement zone is .6515 to .6494. This zone is controlling the near-term direction of the Forex pair.
The main range is .6700 to .6424. Its retracement zone at .6562 to .6595 is the primary upside target. This zone is controlling the longer-term direction of the NZD/USD.
Daily Swing Chart Technical Forecast
Based on Friday’s close at .6521, the direction of the NZD/USD early in the session on Monday is likely to be determined by trader reaction to the short-term 50% level at .6515.
A sustained move over .6516 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the main 50% level at .6562, followed by the main Fibonacci level at .6595 and the main top at .6607.
A sustained move under .6516 will signal the presence of sellers. This could lead to a quick break into the short-term Fib at .6494, followed by Friday’s low at .6465. The latter is a potential trigger point for an acceleration into the October 8 bottom at .6424.
This article was originally posted on FX Empire