NZD/USD Analysis: Kiwi Will Go Higher Only Above This Level

However, things may drastically change as Australia recorded a new Covid19-positive man, who returned from India.

The Indian variant of the virus B.1.617 has a mutation that allows the virus to evade antibodies and there is not much data about this variant, and it will soon be added to the “variant of concern” list. Although the officials of Australia are not urging new lockdowns based on one case, there is a chance that it’s already been spread and might have traveled to neighboring New Zealand. Despite the possible appearance of the Indian variant in New Zealand is theoretical, any news on the virus’s spread would hit hard the local currencies of both Australia and New Zealand.

Tuesday’s monthly New Zealand electronic card retail sales demonstrated growth in purchases, sales in April were up NZD 4%, which is significantly higher than February’s 0.8%. Despite the positive news, was not able to show significant growth against USD and lost in value against the Japanese Yen. US Jolts New Job openings as per March hits a record high with 8.132M jobs and puts the USD again in the “fear of high inflation” zone, US Dollar Index is down 0.12% and is below 90 for the first time since February 2021. Nevertheless, NZD/USD after the release of positive data which should boost NZD, Kiwi against the US Dollar remains steady.

According to the chart analysis, there are two main scenarios to watch for NZD/USD. An uptrend continuation is backed by the test of major support at $0.71200 and a test of MA200, MA100 and EMA50 as support on a 4-hour chart.

The Inverted Head and Shoulders pattern also suggests that NZD/USD must continue to be bullish, however there is an important resistance which the pair should overtake. The resistance lies at $0.73000 which is also strong and holds another chart pattern, which signals the bearish move.

As seen on the chart above, $0.73000 holds both static and dynamic resistances, and while it’s not overtaken, NZD might proceed with a correction down to $0.72500 – $0.71700. An uptrend continuation will be confirmed only above $0.73000, whereas upon a breakout of the aforesaid resistance, NZD/USD will jump to $0.74400. One of the backers of the uptrend could be strong CPI data, which will be announced later today.