Forex Trading: NZDUSD Technical Analysis – January 20, 2020

Marking a bullish candle today, the New Zealand Dollar (NZD) went higher against the US Dollar (USD) on Monday, with a price increase of more than 11 pips as compared to the price the NZDUSD closed on Friday. The price increase occurs due to recent favorable economic news. The technical bias might remain bullish due to the price printed a higher high during the last upside move.

NZDUSD: Technical Analysis

As of writing this piece, the NZDUSD is being exchanged for the price near 0.6621. Towards upside, the price may face a few resistance levels including the 23.6% Fib level which stands just a few pips ahead i-e 0.6624. Next to it 0.6649, the trendline resistance may provide the price some tough time to pass through it. Then comes 0.6755, the high of December 31, 2019, which may push the price back towards the downside as shown in the graph below.

NZDUSD

Coming towards the downside, the price may receive support near 0.6544, the major horizontal support ahead of 0.6462, the trendline support and then 0.6414, the 61.8% Fibonacci level might prevent the price from decreasing below the said level as shown in the graph above.

New Zealand CPI Economic Release

Considering the fundamental perspective, Statistics New Zealand releases figure concerning the consumer price index which measures the price movements comparing the retail prices of goods and services after selecting them from a representative shopping basket on sample basis. The purchasing power of NZD is affected by inflation. The CPI is considered as an important factor to measure inflation rates and determining purchasing trends. Generally speaking, a high reading suggests a bullish market for the New Zealand Dollar (NZD) whereas the low reading indicates a bearish market for the New Zealand Dollar (NZD).

Trade Idea

Since the technical bias is expected to remain bullish, therefore, opening up a long position might work better as compared to the short ones.

 

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