NZD/USD Forex Technical Analysis – Kiwi Steady Ahead of US Consumer Inflation Report

The New Zealand Dollar is edging slightly lower on Tuesday as caution reigned ahead of a key U.S. inflation report later today.

Economists expect U.S. core inflation to ease to 6.1% in November from a year ago, compared with a rise of 6.3% the previous month. Headline prices are expected to have dipped from 7.7% to 7.3%.

A hotter-than-expected reading is likely to put some pressure on the Kiwi Dollar. Prices could move higher if the CPI data misses to the downside. The price action could be muted quickly because of Wednesday’s key Fed announcements.

At 04:39 GMT, the NZD/USD is trading .6377, down 0.0007 or -0.11%.

The U.S. Federal Reserve is widely expected to hike the funds rate by 50 basis points on Wednesday. A step down in pace after four consecutive 75 basis point hikes.

Market projections for the peak in U.S. interest rates have also slipped, with futures pricing indicating the Fed funds rate – currently set between 3.75% and 4% – staying below 5%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been easing since Dec. 5. A trade through .6443 will signal a resumption of the uptrend. A move through .6156 will change the main trend to down.

The minor trend is also up. A trade through .6302 will shift momentum to the downside.

The minor range is .6443 – .6302. The market is currently straddling its pivot at .6372.

The nearest resistance is a long-term 50% level at .6467. The closest support is a long-term Fibonacci level at .6231.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at .6372 is likely to determine the direction of the NZD/USD on Tuesday.

Bullish Scenario

A sustained move over .6373 will indicate the presence of buyers. If this creates enough upside momentum then look for a surge into .6443, followed by .6467. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .6372 will signal the presence of sellers. The nearest downside target is .6302, followed by .6231.