Key Highlights
- NZD/USD rallied above 0.6500 after it broke the 0.6430 resistance area.
- A crucial bullish trend line is forming with support near 0.6470 on the 4-hours chart.
- China’s Consumer Price Index increased 4.5% (YoY) in Nov 2019, more than the 4.2% forecast.
- The US Consumer Price Index could increase 2% in Nov 2019 (YoY).
NZD/USD Technical Analysis
After bottoming near the 0.6330 level, the New Zealand Dollar started a strong rise against the US Dollar. NZD/USD broke many resistances near 0.6400, 0.6420 and 0.6430 to move into an uptrend.
Looking at the 4-hours chart, the pair settled nicely above the 0.6500 resistance, the 100 simple moving average (red), and the 200 simple moving average (green).
Finally, the pair traded above 0.6550 and formed a new multi-month high near the 0.6575 level. Recently, it started a downside correction below the 0.6560 level.
There was a break below the 23.6% Fib retracement level of the upward move from the 0.6408 low to 0.6575 high. On the downside, there are many supports near the 0.6500 level.
Moreover, there is a crucial bullish trend line is forming with support near 0.6470 on the same chart. The trend line is also close to the 50% Fib retracement level of the upward move from the 0.6408 low to 0.6575 high.
Therefore, dips remain well supported near 0.6500 and 0.6470. On the upside, NZD/USD could surge towards the 0.6600 and 0.6620 levels once it clears the 0.6575 resistance.
Looking at GBP/USD, the pair remains strong above 1.3100, and EUR/USD is holding the key 1.1040 support area. However, today’s US CPI release could impact all major pairs, including EUR/USD, GBP/USD, AUD/USD and NZD/USD.
Upcoming Economic Releases
- US Consumer Price Index Nov 2019 (MoM) – Forecast +0.2%, versus +0.4% previous.
- US Consumer Price Index Nov 2019 (YoY) – Forecast +2.0%, versus +1.8% previous.
- US CPI Ex Food & Energy Nov 2019 (YoY) – Forecast +2.3%, versus +2.3% previous.
