NZD/USD Forex Technical Analysis – Counter-Trend Traders Battling Short-Term Resistance at .6123

The New Zealand Dollar is trading higher late in the session on Friday after briefing turning up for the week following an early price spike. The move was likely fueled by short-covering and profit taking after the Kiwi took a beating against the U.S. Dollar throughout the week.

Greenback traders were also booking profits after a steep run as investors prepped for Tuesday’s major U.S. consumer inflation report.

At 18:30 GMT, the NZD/USD is at .6104, up 0.0049 or +0.81%. This is down from an intraday high of .6153. Last week, the Kiwi closed at .6113 against the U.S. Dollar.

Despite the NZD/USD strength, there is no news regarding a major change in the direction of interest rates in the United States and New Zealand. Traders anticipate an 84% chance the Fed will deliver a third consecutive 75 basis-point (bps) rate rise at its next meeting on September 20-21. In New Zealand, the central bank struck a hawkish tone recently, implying at least one more 50 bps rate hike at upcoming meetings.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through .5996 will signal a resumption of the downtrend. A move through .6251 will change the main trend to up.

The minor trend is also up. This is controlling the momentum.

The short-term range is .6251 to .5996. Its retracement zone at .6123 to .6154 is resistance. This area stopped the rally earlier today at .6153.

The major resistance is a long-term Fibonacci level at .6232.

Daily Swing Chart Technical Forecast

Trader reaction to the short-term 50% level at .6123 is likely to determine the direction of the NZD/USD into the close on Friday.

Bearish Scenario

A sustained move under .6123 will indicate the presence of sellers. The first downside target is a minor pivot at .6074. A failure to hold this level will put the NZD/USD in a weak position into the close.

Bullish Scenario

A sustained move over .6123 will signal the presence of buyers. This could trigger a late session surge into the short-term Fibonacci level at .6154. This is a potential trigger point for an acceleration to the upside.