NZD/USD Bears Targeting Long-Term Pivot at .6467

The New Zealand Dollar is trading near a multi-year low on Friday as a flight from risk globally combined with aggressive pricing for U.S. rate hikes to lift the U.S. Dollar broadly. The Kiwi’s losses come even as commodity prices stayed high and upside surprises in domestic inflation data stoked speculation of faster policy tightening at home.

At 11:30 GMT, the NZD/USD is trading .6541, down 0.0040 or -0.61%.

Earlier in the week, a report showed New Zealand’s annual inflation rate topped a three-decade high at the end of last year, official figures show.

The consumer price index (CPI) rose by 5.9% for the last three months of 2021, the fastest rate since mid-1990. That was higher than expected and makes it almost certain that the reserve Bank of New Zealand (RBNZ) will take further steps to curb rising living costs.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through the intraday low at .6537 will signal a resumption of the downtrend. A move through .6512 will reaffirm the downtrend.

A trade through .6891 will change the main trend to up. This is highly unlikely, but due to the prolonged move down in terms of price and time, today’s session begins with the Kiwi inside the window of time for a closing price reversal bottom.

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

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Friday is likely to be determined by trader reaction to .6582.

Bearish Scenario

A sustained move under .6582 will indicate the presence of sellers. Taking out the intraday low at .6535 will indicate the selling pressure is getting stronger. If this continues to generate enough downside momentum then look for the selling to extend into the September 24, 2020 main bottom at .6512.

Taking out .6512 should lead to a quick break into the August 20, 2020 main bottom at .6489. The major support is a long-term 50% level at .6467.

Bullish Scenario

A sustained move over .6582 will signal the presence of buyers. This will be the first sign of a potential shift in momentum. It will also put the NZD/USD in a position to form a potentially bullish closing price reversal bottom.

Side Notes

A close over .6582 will form a closing price reversal bottom. If confirmed, this could trigger the start of a 2 to 3 counter-trend rally.