Yahoo Finance NZD/USD Forex Technical Analysis – Continues to Test Short-Term Retracement Zone at .6394 to .6411
The New Zealand Dollar is trading nearly flat early Monday after posting a strong gain last week. Most of the rally last week took place in one session, or should I say, in a matter of minutes after the Reserve Bank of New Zealand (RBNZ) surprised everyone by keeping interest rates on hold.
Basically traders were forced to cover shorts aggressively after being positioned the wrong way into the RBNZ policy decision. There has been no follow-through to the upside because the banks and the major traders aren’t convinced central bank policymakers did the right thing. Traders now say the RBNZ will like cut rates again in February.
At 04:30 GMT, the NZD/USD is trading .6400, down 0.0003 or -0.04%.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The main trend will change to up on a trade through .6466. A move through .6322 will signal a resumption of the downtrend.
The short-term range is .6466 to .6322. Its retracement zone at .6394 to .6411 is acting like resistance. Trader reaction to this area will determine the near-term direction of the NZD/USD.
The main range is .6204 to .6466. Its retracement zone is support. It stopped the selling at .6322 on November 8.
Daily Technical Forecast
Based on last week’s price action and the current price at .6400, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the short-term 50% level at .6394.
Bullish Scenario
A sustained move over .6394 will indicate the presence of buyers. The early rally is likely to be labored with potential resistance the short-term Fibonacci level at .6411, the downtrending Gann angle at .6416 and last week’s high at .6419.
Taking out .6419 could trigger a breakout to the upside with the first target angle .6441.
Bearish Scenario
A sustained move under .6394 will single the presence of sellers. This could trigger an acceleration to the downside with the first target angle coming in at .6374.
Side Notes
An alternative view has an upside bias developing on a sustained move over the Fibonacci level at .6411, and a downside bias developing on a sustained move under the 50% level at .6394.
This article was originally posted on FX Empire
