New Zealand Dollar Technical Forecast: NZD/USD Snapback Levels
New Zealand Dollar Technical Price Outlook: NZD/USD Weekly Trade Levels
- New Zealand Dollar updated technical trade levels - Weekly Chart
- NZD/USD recovery targets resistance at former support
- Support 6790, 6702/33 (Key) – Resistance 7100, 7121, (bearish invalidation 7189)
The New Zealand Dollar surged more than 1.75% against the US Dollar this week with NZD/USD attempting to pivot back above a key technical zone we’ve been tracking for months. These are the updated targets and invalidation levels that matter on the NZD/USD weekly price chart heading into the close of August. Review my latest Strategy Webinar for an in-depth breakdown of this Kiwitrade setup and more.
New Zealand Dollar Price Chart – NZD/USD Weekly
Notes: In my last New Zealand Dollar Price Forecast we noted that Kiwi was, “poise*d to mark a sixth weekly test of key support at the 2019 / December 2018 highs at 6941/69.” This threshold held for a total of nine consecutive weeks before plummeting lower with the decline reversing just ahead of confluent support at the July 2019 high / 100% extension of the yearly decline at 6790/95. That recovery is now testing initial resistance at former support and we’re looking for possible price inflection off these levels. Watch the weekly close.
Ultimately a topside breach / close above the 100-day moving average at 7013 is needed to invalidate the monthly downtrend with such a scenario exposing the 61.8% Fibonacci retracement of the May decline at 7121 and the objective yearly open at 7189- both zones of interest for possible topside exhaustion IF reached. A break of the lows would shift the focus back on key support at the 38.2% retracement / 2020 yearly open at 6702/33- look for a larger reaction there IF reached.
Bottom line: The New-Zealand Dollar recovery is extending into initial weekly resistance levels – IF last week’s breakdown was legit, this recovery should exhaust ahead of the monthly highs. From a trading standpoint, look to reduce long-exposure, raise protective stops on a stretch towards the 70-handle. Be on the lookout for downside exhaustion closer to 6700 IF reached with a breach / weekly close above the yearly open ultimately needed to suggest a more significant low is in place. I’ll publish an updated New Zealand Dollar Price Outlook once we get further clarity on the near-term Kiwi technical trade levels.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
New Zealand Dollar Trader Sentiment – NZD/USD Price Chart
- A summary of IG Client Sentiment shows traders are net-short NZD/USD - the ratio stands at -1.47 (40.46% of traders are long) – typically weak bullish reading
- Long positions are 2.47% lower than yesterday and 26.34% lower from last week
- Short positions are 4.26% higher than yesterday and 69.71% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests NZD/USD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger NZD/USD-bullish contrarian trading bias from a sentiment standpoint.
Key New Zealand / US Economic Releases
Economic Calendar - latest economic developments and upcoming event risk.
Previous Weekly Technical Charts
- Australian Dollar (AUD/USD)
- Sterling (GBP/USD)
- Crude Oil (WTI)
- Canadian Dollar (USD/CAD)
- Euro (EUR/USD)
- Gold (XAU/USD)
- US Dollar Index (DXY)
--- Written by Michael Boutros, Technical Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex