July 6, 2022
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New Zealand dollar technical forecast: NZD / USD snapback levels

By on August 27, 2021 0

New Zealand Dollar Price Technical Outlook: NZD / USD Weekly Trade Levels

  • New Zealand dollar Updated Technical Trade Levels – Weekly Chart
  • NZD / USD rally targets resistance to old support
  • Support 6790, 6702/33 (key) – Resistor 7100, 7121, (bearish invalidation 7189)

The New Zealand dollar jumped more than 1.75% from the US dollar this week with the NZD / USD attempting to move back above a key technical area that we have been tracking for months. It is the updated goals and invalidation levels that rely on the NZD /USD weekly price chart before the end of August. Review my last Strategy webinar for an in-depth analysis of this KiwiTrade configuration and more.

New Zealand Dollar Price Chart – NZD / USD Weekly

Graphic prepared by Michel Boutros, technical strategist; NZD / USD on Tradingview

Remarks: In my last New Zealand dollar Price prediction we noted that Kiwi was’ set to score a sixth weekly test of key support at 2019 / December 2018 highs at 6941/69. This threshold held for a total of nine consecutive weeks before collapsing, with the decline reversing just before support converges to the July 2019 high / 100% extension of the annual decline to 6790/95. This recovery now tests the first resistance to the old Support and we are looking for a possible inflection of prices compared to these levels. Look at the weekly close.

Ultimately, a breach / close to the upside above the 100-day moving average at 7013 is needed to invalidate the monthly downtrend with such a scenario exposing the 61.8% Fibonacci retracement of the decline from May to 7121 and the annual objective open to 7189– the two areas of interest for a possible depletion of the SI surface reached. A breakout of the lows would shift focus to key support at the 38.2% / 2020 year-on-year retracement open to 6702/33– look for a stronger reaction if it is reached.

At the end of the line : New Zealand dollar rally extends into first week resistance levels – IF last week’s outage was legitimate, this recovery should wear off before monthly highs. From a business perspective, look to reduce long exposure, increase protection stops on a stretch towards the 70-manipulate. Be on the lookout for declining exhaustion closer to 6700 SI reached with a weekly breach / close above the yearly open eventually needed to suggest that a larger low is in place. I will post an update New Zealand Dollar Price Outlook once we have more clarity on the near term kiwi technical trading levels.

For a full description of Michael’s trading strategy, see his Fundamentals of Technical Analysis Series on Building a Trading Strategy

Traders Sentiment to New Zealand Dollars – NZD / USD Price Chart

New Zealand Dollar Traders Sentiment - NZD / USD Price Chart - Kiwi Retailers Positioning - Technical Outlook

  • A summary of Sentiment of IG customers shows traders are net short NZD / USD – ratio stands at -1.47 (40.46% of traders are long) – generally low bullish reading
  • Long positions are 2.47% less than yesterday and 26.34% less than last week
  • Short positions are 4.26% more than yesterday and 69.71% more than last week
  • We generally take a contrarian view of crowd sentiment, and the fact that traders are net short suggests that NZD / USD prices may continue to rise. Traders are even sharper than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger NZD / USD countercurrent trading bias from a feeling point of view.

Top business publications from New Zealand and the United States

Key New Zealand and US Economic Releases - NZD / USD Event Risk - Kiwi

Economic calendarthe latest economic developments and the risks associated with future events.

Previous weekly technical charts

— Written by Michel Boutros, Technical Currency Strategist with DailyFX

To follow Michael on Twitter @MBForex

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