NZD/USD Forex Technical Analysis – Strengthens Over .6074, Weakens Under .5958

The New Zealand Dollar is edging higher early Monday after a report showed New Zealand consumer prices rose 0.8% in Q1 2020 sequentially, driven by higher excise duty on goods like tobacco products and increases in rent.

According to a report released by the Statistics New Zealand on Monday, the Consumer Price Index (CPI) increased 2.5% in Q1 2020 on a year-on-year basis. This marked the highest level since the September 2011 quarter.

At 06:31 GMT, the NZD/USD is trading .6046, up 0.0012 or +0.20%.

Despite the early strength on Monday, we’re not looking for the CPI data to be a major influence on central bank policy with traders focused on risk sentiment and how the global economy responds to the easing of the lockdown process.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through .6131 will signal a resumption of the uptrend. A move through .5922 will change the main trend to down.

The main range is .6448 to .5469. The NZD/USD is currently trading inside its retracement zone at .5958 to .6074. This zone is controlling the near-term direction of the Forex pair.

The short-term range is .5469 to .6131. If the trend changes to down then look for a break into its retracement zone at .5800 to .5722.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at .6046, the direction of the NZD/USD the rest of the session on Monday is likely to be determined by trader reaction to the main Fibonacci level at .6074.

Bullish Scenario

A sustained move over .6074 will indicate the presence of buyers. The next upside target is .6131. Overtaking this level will reaffirm the uptrend. This could also trigger an acceleration to the upside with the March 9 top at .6448 the eventual upside target.

Bearish Scenario

A failure to overcome or sustain a rally over .6074 will signal the presence of sellers. This could trigger a retest of the main 50% level at .5958, followed by the main bottom at .5922. Look for an acceleration into .5844 to .5800 if .5922 fails as support.

Side Notes

If investors continue to liquidate the safe-haven U.S. Dollar and demand for risk continues to increase then look for the upside bias to strengthen on a sustained move over .6074.