The New Zealand dollar edged higher on Friday after recovering from early session weakness. The Kiwi’s rebound was fueled by a weaker greenback, which retreated after a report showed US consumer inflation roughly on line in November. Meanwhile, investors looking for much higher inflation bet the real number would not alter the pace of interest rate hikes.
On Friday, the NZD / USD stood at 0.6798, up 0.0003 or + 0.04%.
The U.S. Consumer Price Index rose 0.8% last month after jumping 0.9% in October, while in the 12 months to November it rose 6.8%, after an increase of 6.2% in October. This compares to a forecast of 0.7% of economists polled by Reuters.
Technical analysis of the daily swing chart
The main trend is downward according to the daily swing chart. However, momentum has been on the rise since the closing reversal low formed on December 7th.
A trade through .6868 will change the main trend upward. A move to 0.6737 will signal a resumption of the downtrend.
The minor trend is also downward. A trade through .6823 will change the minor trend upward. This will confirm the change in momentum. A trade through .6737 will reaffirm the minor trend.
The first minor range is 0.6737 to 0.6823. Its 50% level at 0.6780 is potential support.
The second minor range is .6868 to .6737. Its 50% level at 0.6803 is potential resistance.
The third minor range is 0.7053 to 0.6737. If the main and minor trend changes upward, look for a surge towards its 50% level at 0.6895.
Short term outlook
The direction of NZD / USD early Monday will likely be determined by the reaction of traders at 0.6780 and 0.6803.
A sustained move above .6803 will indicate the presence of buyers. This could trigger a push to the minor top at 0.6823.
Removing .6823 will indicate that the purchase is getting stronger. This could trigger an acceleration to the upside with the main high at 0.6868 the next likely target.
A sustained move below .6780 will signal the presence of sellers. This could trigger an acceleration to the downside with 0.6737 as the next likely target. This price is a potential trigger point for a downward acceleration with the next major low target on November 2, 2020 at 0.6589.