NZD/USD Forex Technical Analysis – Testing Lower Level of Key Retracement Zone at .7204 – .7266

The New Zealand Dollar is trading higher on Friday after investors dismissed a high reading on U.S. inflation as fleeting and no threat to super-accommodative monetary policy, weakening the U.S. Dollar.

At 04:32 GMT, the NZD/USD is trading .7195, up 0.0001 or +0.01%.

The U.S. consumer price index rose 5% in May on a year-over-year basis, the highest since the summer of 2008, when oil prices were skyrocketing. Excluding food and energy, core CPI rose 3.8% year over year, the highest pace since 1992. Economists said that rising prices could be temporary since they are centered in areas impacted by the pandemic.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, yesterday’s closing price reversal bottom could be a sign that momentum is getting ready to shift to the upside.

A trade through .7126 will signal a resumption of the downtrend. A move through .7316 will change the main trend to up.

The minor trend is also down. A trade through .7243 will change the minor trend to up. This will also shift momentum to the upside.

The main range is .7465 to .6943. Its retracement zone at .7204 to .7266 is resistance and a potential trigger point for an acceleration to the upside. The NZD/USD is currently testing the lower or 50% level at .7204.

The short-term range is .6943 to .7316. Its retracement zone at .7129 to .7085 is support. It’s also a potential trigger point for an acceleration to the downside.

Daily Swing Chart Technical Forecast

The direction of the NZD/USD on Friday is likely to be determined by trader reaction to the main 50% level at .7204.

Bullish Scenario

A sustained move over .7204 will indicate the presence of buyers. If this move triggers enough upside momentum then look for a test of the minor top at .7243, followed by the main Fibonacci level at .7266.

Bearish Scenario

A sustained move under .7204 will signal the presence of sellers. This could trigger an intraday break into yesterday’s low at .7165. If this fails as support then look for the selling to possibly extend into .7129 to .7126.

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

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.