The New Zealand Dollar finished slightly higher on Tuesday, but inside the previous session’s range. The move suggests investor indecision and impending volatility. The Forex pair continued to trade inside the wide range from May 8. That was the day the Reserve Bank of New Zealand announced a rate cut.
Although we’ve seen a technical bounce, a rally has been unable to gain traction with traders pricing in another rate cut for later in the year, and amid renewed trade tensions between the United States and China.
On Tuesday, the NZD/USD settled at .6574, up 0.0007 or +0.11%. At 00:49 GMT, the Forex pair is trading .6572, down 0.0002 or -0.03%.
We could see some volatility later today in reaction to the Wage Price Index data from Australia and the slew of economic data from China.
Daily Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6686 will change the main trend to up. A move through .6531 will signal a resumption of the downtrend.
The minor trend is also down. The minor trend will change to up on a move through .6614. This will also shift momentum to the upside.
The short-term range is .6784 to .6531. If the minor trend changes to up then its retracement zone at .6658 to .6687 will become the primary upside target. Since the main trend is down, sellers are likely to come in on a test of this zone.
The main range is .6784 to .6531. If the main trend changes to up then look for the rally to possible extend into its retracement zone at .6735 to .6783.
Daily Technical Forecast
Based on yesterday’s close at .6574 and the early price action, the direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at .6564.
Holding above the downtrending Gann angle at .6564 will indicate weak buying. If it’s able to create enough upside momentum then look for the rally to possibly extend into the minor top at .6614.
Taking out .6614 will change the minor trend to up. This could trigger an eventual rally into the short-term 50% level at .6658.
A sustained move under .6564 will signal the presence of sellers. This could trigger a quick break into the next downtrending Gann angle at .6549. Crossing to the weak side of this angle will put the NZD/USD in a bearish position with the next target the minor bottom at .6531. If .6531 fails as support then look for an eventual break into the October 16, 2018 main bottom at .6465.
This article was originally posted on FX Empire
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