Yahoo Finanza NZD/USD Forex Technical Analysis – Teetering on Collapse into May 2020 Bottom at .5921
The New Zealand Dollar is inching higher against the U.S. Dollar early Friday but remains in a position to notch another week of heavy losses, as growth forecasts for China were downgraded and the Yuan extended its decline.
The Kiwi is down about 2.4% for the week and the daily chart doesn’t show any major support until the May 15, 2020 main bottom at .5921.
At 04:55 GMT, the NZD/USD is trading .6255, up 0.0022 or +0.35%.
Concerns that central bank actions to counter high inflation would crimp global growth and the on-going COVID-driven lockdowns in China have been pressuring investors this week to shed higher-risk, higher-yielding currencies.
JPMorgan this week slashed its China growth forecasts and now sees GDP contracting by an annualized 1.5% in the current quarter. It warned data on retail sales and industrial production due on Monday would show hefty falls.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through .6217 will signal a resumption of the downtrend. A move through .6569 will change the main trend to up.
The minor trend is also down. A trade through .6380 will change the minor trend to up. This will shift momentum to the upside.
On the downside, the major support is a long-term Fibonacci level at .6231.
On the upside, the nearest resistance is a pair of minor pivots at .6299 and .6393.
The major resistance is a long-term 50% level at .6467.
Daily Swing Chart Technical Forecast
The direction of the NZD/USD on Friday is likely to be determined by trader reaction to .6231.
Bearish Scenario
A sustained move under .6231 will indicate the presence of sellers. Taking out .6217 will indicate the selling pressure is getting stronger.
The daily chart indicates there is no major support until the May 15, 2020 main bottom at .5921. Therefore, traders should prepare for an acceleration to the downside, or a slow-grind into this level.
Bullish Scenario
A sustained move over .6232 will signal the presence of counter-trend buyers. The first upside target is .6299. Taking out this level could trigger a surge into the minor top at .6380, followed by a pivot at .6393.
Although a move through .6380 will shift momentum to the upside, we expect new sellers to enter on a test of the major 50% level at .6467.
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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