Renewed Selling Pressure Could Drive NZD/USD into .6589

The New Zealand Dollar is inching lower early Wednesday after a government report showed the country’s jobless rate fell to a record low in the fourth quarter but wage growth came in below expectations, according to Statistics New Zealand data released earlier in the session.

At 04:38 GMT, the NZD/USD is trading .6633, down 0.0006 or -0.09%.

The unemployment rate fell to 3.2% in the quarter-ending December 31, according to the data, better than a forecast of 3.4% unemployment rate by economists polled by Reuters and 3.4% in the prior quarter.

This quarter’s unemployment rate is now the lowest rate recorded since the series began in 1986.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6529 will signal a resumption of the downtrend. A move through .6891 will change the main trend to up.

The minor trend is also down. A trade through .6811 will change the minor trend to up. This will also shift momentum to the upside.

The minor range is .6811 to .6529. Its 50% level at .6670 is the nearest resistance.

The short-term range is .6891 to .6529. Its retracement zone at .6710 – .6753 is the primary upside target and best resistance area.

Another minor range is .6529 to .6650. Its retracement zone at .6589 to .6575 is the nearest potential support area.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to .6638.

Bullish Scenario

A sustained move over .6638 will indicate the presence of buyers. Taking out the intraday high at .6650 will indicate the buying is getting stronger. This could trigger a further rally into .6670.

Taking out .6670 could trigger an acceleration to the upside with .6710 – .6753 the next major upside target.

Bearish Scenario

A sustained move under .6638 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling pressure to extend into .6589 to .6575.

Side Notes

Since the main trend is up, new sellers are likely to re-emerge on a test of .6710 – .6753. They are going to try to form a potentially bearish secondary lower top.

On the downside, a test of .6589 – .6575 could attract aggressive counter-trend buyers. They are going to try to create a potentially bullish secondary higher bottom.