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NZD/USD Forex Technical Analysis – Bullish Tone Developing Over .7232 with .7254

The New Zealand Dollar is trading higher on Monday, boosted by a bullish outlook for equity and commodity prices ahead of the country’s planned coronavirus vaccine rollout. After zigzagging last week, the Kiwi appears to be poised to make another attempt to breakout to the upside and eventually challenge the multi-year high at .7316.

At 08:10 GMT, the NZD/USD is trading .7244, up 0.0023 or +0.32%.

New Zealand vaccinations are planned to start February 20. In the meantime, the risk-linked currency is expected to benefit from higher commodity prices and its economy’s performance following its success in controlling the spread of the COVID-19 pandemic.



Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, over the past week, traders have been struggling to maintain the currency’s upside momentum.

A trade through .7254 will signal a resumption of the uptrend, while a break under .7136 will change the main trend to down.

The minor trend is down. This is controlling the momentum. A trade through .7251 will change the minor trend to up. This will shift momentum to the upside.

The short-term range is .7316 to .7096. The NZD/USD is currently trading on the strong side of its retracement zone at .7206 to .7232. Holding above this zone will set a bullish tone.

The main range is .7003 to .7316. Its retracement zone at .7159 to .7123 is support.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the NZD/USD into the close will be determined by trader reaction to .7232.

Bullish Scenario

A sustained move over .7232 will indicate the presence of buyers. If this creates enough upside momentum then look for traders to take a run at .7251 to .7254. The latter is a potential trigger point for an acceleration to the upside.

The daily chart indicates there is plenty of room over .7254 with the January 6 main top at .7316 the primary upside target.

Bearish Scenario

A sustained move under .7232 will signal the presence of sellers. The first downside target is .7206. If this price level fails as support then look for a steep plunge into .7176 to .7159.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire


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