Last week, the New Zealand dollar made an attempt to recover, but never went too far, despite good data. The calendar is lighter in the upcoming week, but this does not imply no action. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

The kiwi enjoyed a winning streak of economic data: quarterly CPI rose 0.2%, not impressive on its own, but better than 0% expected. Milk prices rebounded by 1.4% and also visitor arrivals and credit card usage were on the rise. In the US, the dollar took a temporary break before moving higher, partially fueled by the beat on existing home sales.

Updates:

NZD/USD daily graph with support and resistance lines on it. Click to enlarge:

1. Trade balance: Wednesday, 21:45. In August, New Zealand suffered a big deficit in its balance of trade, over a billion NZD. A smaller deficit is expected for September after that 1.265 billion in August.

NZD/USD Technical Analysis

Kiwi/dollar made a move to the upside, stopping at 0.7265.

Technical lines, from top to bottom:

The round number of 0.74 served as resistance and support back in 2015. 0.7330 was an initial high in 2016.

0.7265 was a swing high in October 2016 and works as resistance. 0.7230 served as support in September 2016.

0.7160 is a pivotal line within the range. 0.7140 worked in both directions in the past months. 0.7075 was a swing low in August and had a role afterwards as well. It is followed by 0.7035, the low seen in October 2016.

The round level of 0.70 is still important because of its roundness but it isn’t really strong. The low of 0.6940 allowed for a temporary bounce.

I remain bearish on NZD/USD

Despite the good data from New Zealand, the dollar’s pause in the rising trend may have ended, thus paving the way for further falls in NZD/USD.

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