Search ForexCrunch

No events are due this week in New Zealand, so the outlook will focus on technicals. Here’s an outlook for NZD/USD.

Q3 was bad in New Zealand – the Christchurch earthquake took its toll and the economy contracted for the first time since the recovery began.

NZD/USD daily chart with support and resistance lines on it. Click to enlarge:

nzd usd technical analysis December 27-31

Let’s start:

* All times are GMT.

NZD/USD Technical  Analysis

The kiwi managed to recover and rise above 0.74, enjoying the rise of the Australian dollar against the greenback and closed above the 0.74 line mentioned last week.

Looking down, 0.74 now provides strong support. It returned to this role that it had in the past. 0.7355 is proved to be quite strong as well – it stopped the fall.

Below, 0.73 provides minor support. Lower, 0.7210 was a stepping stone for the kiwi on the way up and now provides support.

Even lower, 0.7160 was a resistance line in July and also in August, and now works as support. The last line for now is 0.6950, which was the lowest line in 6 months.

Looking up, 0.7523 was a resistance line back in 2009 and is now a minor line.  Above, 0.7644 held the pair in October and also in November, and is now a strong line. Higher, 0.7736 was a support line when the kiwi was trading higher.

Higher, 0.7836, which was a swing high a few weeks ago. The next level is 0.7975, the highest level this year, and just under the round number of 0.80.

I bearish on NZD/USD.

The Chinese rate hike, together with the contraction in the economy reported in Q3, all weigh on the New Zealand dollar.

Further reading:

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..