Tuesday, December 06, 2022

NZD/USD Reaction to .6955 Sets Next Week’s Tone

On Friday, the NZD/USD settled at .6957, down 0.0008 or -0.11%.

Exerting the most pressure on the New Zealand Dollar on Friday was a rebound in its US counterpart. A sharp rise in US Treasury yields made the US Dollar a more attractive investment.

The benchmark 10-year US Treasury yield hit a fresh two-year high Friday as investors anticipate a more aggressive Fed. The 10-year rate at its high of Friday’s session hit 2.503%, its highest level since May 2019. The yield started the week near 2.15%.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6989 will signal a resumption of the uptrend. A trade through .6729 will change the main trend to down.

The minor trend is also up. A trade through .6865 will change the minor trend to down. This will shift momentum to the downside.

The NZD/USD settled on the strong side of a long-term retracement zone at .6955 to .6874, making this area support.

The minor range is .6865 to .6989. Its 50% level at .6927 is additional support.

The short-term range is .6729 to .6989. If the minor trend changes to down then its 50% level at .6859 will become the next target.

Short-Term Outlook

The daily chart indicates that buyers are trying to defend the long-term Fibonacci level at .6955. If successful then look for a surge into last week’s high at .6989.

Taking out .6989 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for an acceleration into a pair of long-term main tops at .7053 and .7081.

On the downside, a failure to hold .6955 will indicate the presence of sellers. This could trigger a quick break into the minor pivot at .6927.

Taking out the minor pivot at .6927 will indicate the selling pressure is getting stronger with a support cluster at .6874, .6865 and .6859 the primary target.

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