The New Zealand Dollar is trading higher early Monday, following through to the upside following Friday’s strong performance. That move was likely fueled by short-covering in response to a disappointing U.S. Non-Farm Payrolls report. Traders are also saying that traders are also reacting to the looming trade deal between the United States and China that is expected to be signed in Washington on Wednesday, and a stronger Yuan fix that is boosting sentiment.
At 06:26 GMT, the NZD/USD is trading .6648, up 0.0012 or +0.19%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has been trending lower since December 31. A trade through .6554 will change the main trend to down. A move through .6758 will signal a resumption of the uptrend after a six day sell-off.
The main range is .6204 to .6758. Its retracement zone at .6567 to .6497 is potential support. It’s also controlling the near-term direction of the NZD/USD.
The intermediate range is .6554 to .6758. The Forex pair is currently straddling its retracement zone at .6656 to .6632.
The short-term range is .6758 to .6600. Its retracement zone at .6679 to .6698 is the next potential upside target.
Daily Swing Chart Technical Forecast
Based on the early price action, the direction of the NZD/USD the rest of the session on Monday is likely to be determined by trader reaction to the 50% level at .6656 and the 61.8% level at .6632.
A sustained move over .6656 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into .6679 to .6698.
If sellers stop the rally at .6679 to .6698 then look for a secondary lower top to form. If buyers can take out .6698 then look for the rally to possibly extend into .6758.
A sustained move under .6632 will signal the presence of sellers. This could trigger a retest of last week’s low at .6600. This is followed by the main Fibonacci level at .6567 and the main bottom at .6554. A trade through this level will change the main trend to down.
This article was originally posted on FX Empire
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