Forex technical analysis: NZDUSD falls ahead of CPI data

Technical Analysis

Author: Greg Michalowski | nzdusd

Quarterly CPI data due out in the new trading day

At 6:45 PM ET/2245 GMT the 1Q CPI will be released in New Zealand. The expectation is for a rise of 0.8%. In the 4th quarter the rise was reported at 0.4%.

YoY is expected to come in at 2.0% up from 1.3% in the 4th quarter.  That is in the middle of the 1-3% range.  

What does the pair look like from a technical perspective?

Looking at the daily chart, the price remains below the 100 day MA at 0.7076 level.   If you run a Fibonacci from the Feb high tot he March low, the 38.2% comes in at that level too. The high price today reached 0.7052 but has rotated back lower.  On a move higher (higher inflation), that 100 day MA and 38.2% will be a level that needs to be broken for more upside potential.  Above that level and the 200 day MA and 50% retracement will be the next key target at 0.7135 area.  If tested, I would expect some cause for pause against that level.

On the downside, the low last week stalled at a lower trend line. That trend line comes in at 0.6910. That and other swing lows will be need to be broken for further downside potential. 

Drilling into the 4-hour chart, the fall lower today has the pair looking to test both the 100 and 200 bar MA on that chart (blue and green lines). They come in at 0.6986-89.  A move below those MAs open up the downside for a further fall toward the lows from last week.