Failure to Hold .6710 Could Send NZD/USD into .6669 – .6636

The New Zealand Dollar is trading sharply lower on Thursday after reports that Russia had begun an attack on Ukraine, tipping a longstanding diplomatic crisis into a military conflict.

The financial markets are likely to be thoroughly shaken on Thursday on the news that Russia has launched an attack on Ukraine, and one that appears to be more widespread than expected.

At 06:31 GMT, the NZD/USD is trading .6728, down 0.0043 or -0.64%.

The launching of numerous military operations in Ukraine is driving investors out of riskier assets like the New Zealand Dollar, making the U.S. Dollar a more attractive safe-haven asset.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6810 will signal a resumption of the uptrend. A move through .6680 will change the main trend to down.

The main range is .6891 to .6529. The NZD/USD is currently trading inside its retracement zone at .6710 to .6753. This zone is controlling the near-term direction of the Kiwi.

The new short-term range is .6529 to .6810. If the main trend changes to down then look for a test of the retracement zone at .6669 to .6636.

Short-Term Outlook

The direction of the NZD/USD over the short-run is likely to be determined by trader reaction to .6710 and .6753.

Bearish Scenario

A sustained move under .6710 will indicate the presence of sellers. The first downside target is the main bottom at .6680, followed by the short-term 50% level at .6669.

Taking out .6669 will indicate the selling pressure is getting stronger. This could trigger a further decline into the short-term Fibonacci level at .6636.

Bullish Scenario

A sustained move over .6710 will signal the return of buyers. The first upside target is the main Fibonacci level at .6753. Overtaking this level will indicate the buying is getting stronger with .6810 the next major upside target.