NZD / USD Forex Technical Analysis – Expected Volatility; Strengthens above .6821, weakens below .6805
The New Zealand dollar is trading almost flat on Monday morning, in stark contrast to Friday’s selling pressure that took the currency to its lowest level in three months against the US dollar. Kiwi trade is relatively calm after the initial shock of the discovery of the Omicron coronavirus variant that prompted investors to take cover last week.
A surge in trading volume is also expected to appease traders as major banks and institutions return to markets after the extended US vacation last week. Nonetheless, traders should continue to expect volatility with little information on the new strain.
At 02:13 GMT, the NZD / USD is trading at 0.6825, up 0.0004 or + 0.06%.
Scientists at BioNTech said on Friday they could find out in two weeks whether the vaccine it developed with Pfizer needs to be reworked.
Technical analysis of the daily swing chart
The main trend is downward according to the daily swing chart. A trade to Friday’s three-month low at 0.6805 will signal a resumption of the downtrend.
A move to .7219 will change the main trend upward. This is highly unlikely, but due to the prolonged decline in price and time, today’s session starts with NZD / USD in the time window for a closing price reversal.
The minor trend is also downward. A trade up to .7053 will change the minor trend upward. This will also shift the momentum upward.
The minor range is 0.7053 to 0.6805. Its 50% or pivot level at 0.6929 is the closest bullish target.
Technical forecasts of the daily swing chart
The direction of NZD / USD on Monday will likely be determined by the reaction of traders at .6821 and .6805.
A sustained move above .6821 will indicate the presence of aggressive countertrend buyers. The first target on the upside is 0.6832, followed by 0.6859.
Removing 0.6859 will indicate that the buy is getting stronger. This could trigger a short term acceleration in the minor pivot at 0.6929.
A sustained move below .6805 will signal the presence of sellers. If traders exit this level with significant sell volume, look for the start of an acceleration towards the main floor on November 2, 2020 at 0.6589 in the near term.
Notes to the appendix
Exiting 0.6805 and then closing at 0.6821 will form a potentially bullish closing price reversal on the daily chart. If confirmed, the move could trigger the start of a 2-3 day countertrend correction.