NZD/USD Forex Technical Analysis – Straddling .6282 Pivot Ahead of US Consumer Inflation Report

The New Zealand Dollar is trading flat early Tuesday as several major players remain on the sidelines ahead of Wednesday’s key U.S. consumer inflation report.

The Kiwi put in a strong performance the previous session after Friday’s surprisingly strong U.S. jobs report not only boosted the chances of a 75 basis-point rate hike by the U.S. Federal Reserve but also narrowed the odds on more aggressive tightening by the Reserve Bank of New Zealand (RBNZ).

At 03:51 GMT, the NZD/USD is trading .6286, up 0.0001 or +0.01%.

U.S. Consumer Price Inflation (CPI) data for July will be the next major economic release on Wednesday. It is expected to show that prices rose at an 8.7% annual pace during the month, according to the median estimate of economists polled by Reuters.

Fed funds futures traders are now pricing for a 69% chance of another 75 basis points rate increase in September, and for the Fed Funds rate to rise to 3.62% by March, from 2.33% now.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .6396 will change the main trend to up. A move through .6061 will signal a resumption of the downtrend.

The minor trend is also down. A trade through .6315 will change the minor trend to up. This will shift momentum to the upside.

The minor range is .6353 to .6212. The NZD/USD is currently straddling its pivot at .6282.

On the upside, the first resistance is a short-term 50% level at .6319, followed by a short-term Fibonacci level at .6379.

On the downside, the major support is a long-term Fibonacci level at .6231. This is followed by a short-term retracement zone at .6207 to .6172.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at .6282 is likely to determine the direction of the NZD/USD on Tuesday.

Bullish Scenario

A sustained move over .6283 will indicate the presence of buyers. This could trigger a surge into the resistance cluster at .6315 – .6319. Overtaking this area could extend the rally into the main top at .6353.

Bearish Scenario

A sustained move under .6282 will signal the presence of sellers. This could trigger a sharp break into the long-term Fibonacci level at .6231.

A break under .6231 will indicate the selling pressure is getting stronger with .6207 – .6172 the next likely target.