The New Zealand Dollar weakened on Friday after hitting its highest level since August 30. The selling pressure helped form a potentially bearish closing price reversal top. If confirmed, this chart pattern could trigger the start of a 2 to 3 day correction.
The Kiwi retreated on Friday as the U.S. Dollar firmed on persistent concerns about an escalating trade dispute between the United States and China in a week where both side slapped new tariffs on each other’s goods.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The NZD/USD settled at .6680, down 0.0007 or -0.11%.” data-reactid=”13″>The NZD/USD settled at .6680, down 0.0007 or -0.11%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. However, momentum is trending higher. The main trend will chart to up on a trade through .6727. A trade through .6500 will signal a resumption of the downtrend.
On Friday, the NZD/USD formed a potentially bearish closing price reversal top. A trade through .6700 will negate the chart pattern. A move through .6667 will confirm the chart pattern and signal the start of a 2 to 3 day break with the 50% to 61.8% zone of its last rally the target.
The main range is .6851 to .6500. Its retracement zone at .6675 to .6717 stopped the rally on Friday.
The short-term range is .6500 to .6700. If the reversal top is confirmed then look for a correction into its retracement zone at .6600 to .6576.
Daily Swing Chart Technical Forecast
Based on Friday’s close at .6680, the direction of the NZD/USD on Monday is likely to be determined by trader reaction to the 50% level at .6675.
A sustained move under .6675 will indicate the presence of sellers. A trade through .6667 will confirm the reversal top. The daily chart indicates there is plenty of room to the downside so be prepared for a potential acceleration to the downside. The primary downside target is .6600 to .6576.
A sustained move over .6675 will signal the presence of buyers. If this move takes out .6700 then look for the rally to extend into .6717, followed by the main top at .6727. A trade through this level will change the main trend to up. This could fuel an acceleration to the upside.
Late Friday, China canceled the trade talks with the U.S. This is potentially bearish so watch the downside early Monday.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally posted on FX Empire” data-reactid=”35″>This article was originally posted on FX Empire
More From FXEMPIRE:
- China Cancels Trade Meeting, OPEC May Raise Production by 500K
- Bitcoin Cash, Litecoin and Ripple Daily Analysis – 23/09/18
- Bitcoin – Bears Look to Bring Bitcoin Back Down to Earth
- Natural Gas Weekly Price Forecast – natural gas markets rally towards resistance during the week
- GBP/USD Weekly Price Forecast – the British pound gets pummeled at the end of the week
- Silver Weekly Price Forecast – Silver markets looking for support