Forex NZD / USD Technical Analysis – Strengthens above 0.7204, weakens below 0.7145
The New Zealand dollar is trading slightly higher on Wednesday after posting a potentially bearish closing price reversal high from the previous session. Concerns over rising coronavirus cases around the world have helped spike demand for the safe haven greenback, putting pressure on the commodity-linked kiwifruit.
At 03:40 GMT, the NZD / USD is trading at 0.7174, up 0.0003 or + 0.04%.
Separately, New Zealand’s Consumer Price Index (CPI) rose faster than expected in the first quarter as transport and house prices jumped, according to data released by Statistics New Zealand on Wednesday.
The CPI rose 0.8% in the quarter ended March 31, compared to 0.5% in the previous period and to a level above the forecast of 0.7%. Annual inflation was 1.5%, compared to 1.4% in the previous quarter. Nine economists polled by Reuters had predicted that the annual CPI would remain unchanged.
Technical analysis of the daily swing chart
The main trend is up according to the daily swing chart. However, Tuesday’s closing price reversal top may be an early indication that momentum is preparing to shift lower.
A trade passing through .7230 will cancel the closing price reversal top and signal the resumption of the uptrend. The main trend will go down on a trade through .7122.
The primary range is 0.7465 to 0.6943. Its retracement zone at .7204 to .7266 is resistance. This area stopped buying Tuesday at 0.7230. It also controls the short term direction of the Forex pair.
The short term range is 0.7270 to 0.6943. Its retracement zone at 0.7145 to 0.7106 is support. This area stopped selling at 0.7122 earlier in the week.
The main support is the 0.7027 to 0.6924 retracement area.
Daily Swing Chart Technical Forecasts
The direction of NZD / USD on Wednesday will likely be determined by the trader’s reaction to .7166.
A sustained move above 0.7166 will indicate the presence of buyers. This could lead to a painstaking rally with potential targets at .7204, .7230, .7266 and .7270. The latter is a potential trigger point for upward acceleration.
A sustained move below 0.7166 will signal the presence of sellers. The first downside target is 0.7145, followed by 0.7122 and 0.7106. The latter is a potential trigger point for downward acceleration.
For an overview of all of today’s economic events, check out our economic calendar.