NZD/USD Forex Technical Analysis – Strengthens Over .7204, Weakens Under .7145

The New Zealand Dollar is trading slightly higher on Wednesday after posting a potentially bearish closing price reversal top the previous session. Concerns over rising global coronavirus cases helped drive up demand for the safe-haven greenback, pressuring the commodity-linked kiwi.

At 03:40 GMT, the NZD/USD is trading .7174, up 0.0003 or +0.04%.

In other news, New Zealand’s consumer price index (CPI) rose faster than expected in the first quarter as transport and housing prices jumped, according to data released by Statistics New Zealand on Wednesday.

CPI rose 0.8% in the quarter-ended March 31 from 0.5% in the previous period and higher than the 0.7% forecast. Annual inflation was 1.5%, form 1.4% the previous quarter. Nine economists polled by Reuters had forecast annual CPI to stay unchanged.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, Tuesday’s closing price reversal top may be an early indication that momentum is getting ready to shift to the downside.

A trade through .7230 will negate the closing price reversal top and signal resumption of the uptrend. The main trend will change to down on a trade through .7122.

The main range is .7465 to .6943. Its retracement zone at .7204 to .7266 is resistance. This zone stopped the buying on Tuesday at .7230. It is also controlling the near-term direction of the Forex pair.

The short-term range is .7270 to .6943. Its retracement zone at .7145 to .7106 is support. This zone stopped the selling at .7122 earlier in the week.

The main support is the retracement zone at .7027 to .6924.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Wednesday is likely to be determined by trader reaction to .7166.

Bullish Scenario

A sustained move over .7166 will indicate the presence of buyers. This could lead to a labored rally with potential targets at .7204, .7230, .7266 and .7270. The latter is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under .7166 will signal the presence of sellers. The first downside target is .7145, followed by .7122 and .7106. The latter is a potential trigger point for an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.