The New Zealand Dollar closed marginally higher against the U.S. Dollar on Monday, recouping some losses from the previous week on increased risk appetite. The inside move indicates investor indecision and impending volatility.
The currency also received support from a jump in Asian shares. They were boosted by data over the weekend showing China’s industrial firms grew for the fourth consecutive month in August.
NZD/USD settled at .6555, up 0.0008 or +0.12%.” data-reactid=”14″>On Monday, the NZD/USD settled at .6555, up 0.0008 or +0.12%.
The Kiwi also benefited from a surge in the major U.S. stock indexes on revived hopes for another coronavirus stimulus package. There was also a report that President Trump will announce the shipment of millions of coronavirus tests to states urging them to use them to reopen.
Gains were limited by a dovish outlook from the Reserve Bank of New Zealand. Most economists expect central bank policymakers to announce negative interest rates in early 2021.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6512 will signal a resumption of the downtrend.
The main trend will change to up on a trade through .6798. This is highly unlikely today, but the NZD/USD is down seven days from this top, putting it inside the window of time for a short-term counter-trend rally.
The short-term range is .6381 to .6798. The market has been trying to build a support base inside its retracement zone at .6590 to .6540 for several days. This zone is controlling the near-term direction of the Forex pair.
The minor range is .6798 to .6512. Its retracement zone at .6655 to .6689 is the primary upside target.
Based on Monday’s price action, the direction of the NZD/USD is likely to be determined by trader reaction to the main Fibonacci level at .6540.
A sustained move under .6540 will indicate the presence of sellers. The first downside target is the minor bottom at .6512. Taking out this level could trigger a further break into the main bottom at .6489. This is a potential trigger point for an acceleration to the downside with the June 15 main bottom at .6381 the next likely target.
A sustained move over .6540 will signal the presence of buyers. This could trigger a rally into the 50% level at .6590. This is a potential trigger point for an acceleration to the upside with the near-term target zone coming in at .6655 to .6689.
” data-reactid=”43″>For a look at all of today’s economic events, check out our economic calendar.
article was originally posted on FX Empire” data-reactid=”44″>This article was originally posted on FX Empire
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Read More: NZD/USD Forex Technical Analysis – Weakens Under .6540, Strengthens Over .6590