NZD/USD Forex Technical Analysis – Strengthens Over .6803, Weakens Under .6780

The New Zealand Dollar inched higher on Friday after recovering from early session weakness. The rebound in the Kiwi was fueled by a weaker greenback, which retreated after a report showed U.S. consumer inflation came in roughly in line with expectations in November. Meanwhile, investors who had been looking for much higher inflation, bet that the actual number would not change the pace of interest rate hikes.

On Friday, the NZD/USD settled at .6798, up 0.0003 or +0.04%.

The U.S. Consumer Price Index rose 0.8% last month after surging 0.9% in October while in the 12 months through November, it rose 6.8%, following a 6.2% advance in October. This compared with a 0.7% forecast from economists polled by Reuters.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom on December 7.

A trade through .6868 will change the main trend to up. A move through .6737 will signal a resumption of the downtrend.

The minor trend is also down. A trade through .6823 will change the minor trend to up. This will confirm the shift in momentum. A trade through .6737 will reaffirm the minor trend.

The first minor range is .6737 to .6823. Its 50% level at .6780 is potential support.

The second minor range is .6868 to .6737. Its 50% level at .6803 is potential resistance.

The third minor range is .7053 to .6737. If the main and minor trend change to up then look for a surge into its 50% level at .6895.

Short-Term Outlook

The direction of the NZD/USD early Monday is likely to be determined by trader reaction to .6780 and .6803.

Bullish Scenario

A sustained move over .6803 will indicate the presence of buyers. This could trigger a surge into the minor top at .6823.

Taking out .6823 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the main top at .6868 the next likely target.

Bearish Scenario

A sustained move under .6780 will signal the presence of sellers. This could trigger an acceleration to the downside with .6737 the next likely target. This price is a potential trigger point for an acceleration to the downside with the next target the November 2, 2020 main bottom at .6589.