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New Zealand Dollar Traders Wait on Key CPI Data

New Zealand Dollar

The New Zealand dollar is not very active against the U.S. dollar as currency traders are waiting on key inflation data to be published today.

The NZD/USD Forex market has formed a bearish spinning top candlestick on the above daily MT 4 chart which could mean more losses in this benchmark Forex market.

Headlining today’s economic calendar is inflation data out of the United States. The U.S. will publish their monthly core and headline consumer price index (CPI).

The April U.S. consumer price index is forecasted to come in at 3.6 percent. This is after the CPI gained 2.6 percent the month prior. Inflation is worrying Forex traders as well as other financial market participants.  

Germany is releasing their final monthly harmonized consumer price index. The United Kingdom will release monthly gross domestic product data and initial quarterly gross domestic product (GDP) data.

Forex market sentiment is not favoring sentiment linked currencies like the New Zealand dollar (NZD). Mixed coronavirus vaccine news is worrying Forex traders. While the Sinovac Covid-19 vaccine from China seems to be effective against all variants, Johnson & Johnson’s vaccine has caused some blood clotting issues. Also rising tensions in the Middle East are worrying.

Daily New Zealand Dollar Technical Analysis (NZD/USD)

Looking at price action, the New Zealand dollar has been rather bearish for the last three trade sessions after hitting a high price point at 0.73 on Monday.

The NZD/USD Forex market is trading below 0.73 after forming the spinning top candlestick on Monday. This signals a possible correction lower which should be confirmed with a daily close below 0.7250.

The next downside barrier lines up at the twenty day simple moving average in play at 0.7215 with the key horizontal support at 0.7170 then coming into focus.

The 14 day MACD histogram is signaling bearish price action as Forex traders now look to possibly challenge the downside barrier at 0.71.

On the upside, a daily close above 0.7270 opens the door for Monday’s high price point at 0.73. There is a key upside barrier lining up at 0.7340 with the 26 February high price point at 0.7384 then popping up on the radar.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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