NZD / USD Forex Technical Analysis – Confirmation of Minor Reversal Could Lead Kiwi to 0.7027
The New Zealand dollar is trading slightly higher late in Friday’s session after giving up most of its earlier gains. The Kiwi began to retire after surging 10-year US Treasury yields. The currency rose earlier in the session to its highest level in more than a week after the Commerce Department announced that the basic personal consumption expenditure price index rose 3.4% in May. compared to the previous year, as expected.
At 18:13 GMT, the NZD / USD is trading at 0.7063, up 0.0003 or + 0.04%.
The US dollar also came under pressure early in the US session after data showed US consumer spending was flat in May. Consumer spending, which accounts for more than two-thirds of US economic activity, held steady after a revised upward jump of 0.9% in April. Economists polled by Reuters predicted a 0.4% increase in consumer spending.
Technical analysis of the daily swing chart
The main trend is downward on the daily swing chart. A trade through .7316 will change the main trend upward. A move to .6923 will signal a resumption of the downtrend.
The minor trend is also downward. A trade through .7243 will change the minor trend upward. This will also shift the momentum upward.
The main support is a retracement area of 0.7027 to 0.6924. This area halted the recent liquidation.
On the upside, the first 50% resistance level at 0.7083 helped stop the rally earlier in the session. The short term range is 0.7316 to 0.6923. Its 0.7120 to 0.7166 retracement area is the next area of potential resistance.
Technical forecasts of the daily swing chart
The direction of the NZD / USD towards the close will be determined by the trader’s reaction at 0.7083.
A sustained move below .7083 will indicate the presence of sellers. If this move creates enough downside momentum, then expect the sell to eventually extend 0.7027 to 0.7009.
A sustained move above .7083 will signal the presence of buyers. The first upside target is the intraday high at 0.7095, followed by 0.7120 at 0.7166.
Notes to the appendix
It looks like the NZD / USD is forming a potentially bearish secondary lower peak. This could lead to a minor pivot test at 0.7009. This movement will be critical for the structure of the chart model. Aggressive countertrend buyers are likely to enter a test of this level. They will try to form a secondary upper background. The sellers will try to exit .7009 in the hopes that this will lead to confirmation of the downtrend.