The New Zealand Dollar is posting a similar move to the Australian Dollar on Thursday, which is understandable since they both have close ties to Chin
The New Zealand Dollar is posting a similar move to the Australian Dollar on Thursday, which is understandable since they both have close ties to China’s economy.
Prices have been hovering near a multi-month high reached on Dec. 13 for two weeks, underpinned by positive moves by China to reopen its economy after being shut down by COVID restrictions for three years.
However, reports of massive infections in China are raising doubts that the country can continue to take steps toward reopening the economy in a timely manner. This could be limiting the New Zealand Dollar’s upside potential.
At 04:35 GMT, the NZD/USD is trading .6335, up 0.0024 or +0.38%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through .6514 will signal a resumption of the uptrend, while a move through .6156 will change the main trend to down.
The minor trend is down. This is controlling the momentum. A trade through the new minor bottom at .6231 will reaffirm the minor trend.
The nearest support is a long-term Fibonacci level at .6231, followed by a short-term 50% level at .6177.
The closest resistance is a minor pivot at .6373, followed by a long-term 50% level at .6467.
Daily Swing Chart Technical Forecast
Trader reaction to .6293 is likely to determine the direction of the NZD/USD on Thursday.
Bullish Scenario
A sustained move over .6293 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into the minor pivot at .6373. Overtaking this level could trigger an acceleration to the upside with .6467 – .6514 the next target zone.
Bearish Scenario
A sustained move under .6293 will signal the presence of sellers. This could trigger a break into the support cluster at .6231. If this fails then look for the NZD/USD to possibly extend into the support cluster at .6177 – .6156. A trade through the latter will change the main trend to down and could trigger an acceleration to the downside.
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