The New Zealand Dollar closed lower on Friday as the U.S. Dollar strengthened ahead of the start of the U.S. Federal Reserve’s two-day meeting on November 2-3. The Fed is widely expected to begin tapering its massive stimulus, but traders aren’t sure about the central bank’s timing of its first and subsequent rate hikes.
On Friday, the NZD/USD settled at .7171, down 0.0033 or -0.45%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on October 21.
A trade through .7219 will signal a resumption of the uptrend. The main trend will change to down on a move through .6860.
The minor trend is also up. A trade through .7131 will change the minor trend to down. This will confirm the shift in momentum.
The minor range is .7219 to .7131. On Friday, the NZD/USD settled slightly below its pivot at .7175 after straddling it throughout the session.
The main range is .7316 to .6806. The NZD/USD is currently trading on the strong side of its retracement zone at .7121 to .7061, making is support.
Additional support is a pair of 50% levels at .7027 and .7012.
Short-Term Outlook
The direction of the NZD/USD early Monday is likely to be determined by trader reaction to .7175.
Bullish Scenario
A sustained move over .7175 will signal the presence of buyers. If this move is able to generate enough upside momentum then look for a surge into .7217 – .7219. Overtaking these levels could extend the move into the June 7 main top at .7243. This is a potential trigger point for an acceleration to the upside with the May 26 main top at .7316 the next likely target.
Bearish Scenario
A sustained move under .7175 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into .7131, followed by .7121. The latter is a potential trigger point for an acceleration to the downside with .7061 the next likely target.
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This article was originally posted on FX Empire
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2021-10-31 20:30:07Z
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