NZD/USD Regains Strength, Dips Remain Supported
- NZD/USD started a fresh increase above the 0.7000 resistance zone.
- A major bullish trend line is forming with support near 0.6995 on the 4-hours chart.
- The US CPI increased 5.4% in July 2021 (YoY), similar to the last reading.
- The UK GDP is likely to increase 4.8% in Q2 2021 (Preliminary) (QoQ).
NZD/USD Technical Analysis
The New Zealand Dollar remained well supported above the 0.6950 zone against the US Dollar. NZD/USD started a fresh increase from the 0.6968 low and climbed above 0.7000.
Looking at the 4-hours chart, the pair settled nicely above the 0.7000 level, the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
There was a break above the 50% Fib retracement level of the key decline from the 0.7088 swing high to 0.6968 low. An immediate resistance on the upside is near the 0.7060 level.
The 76.4% Fib retracement level of the key decline from the 0.7088 swing high to 0.6968 low is also near the 0.7060 level. Any more gains could set the pace for a break above the 0.7088 high. The next key resistance could be 0.7120.
On the downside, the first key support is near 0.7020. The next major support is near the 0.7000 level. There is also a major bullish trend line forming with support near 0.6995 on the same chart. A downside break below the trend line could push the pair towards 0.6950.
Fundamentally, the US Consumer Price Index for July 2021 was released yesterday by the US Bureau of Labor Statistics. The market was looking for an increase of 5.3% compared with the same month a year ago.
The actual result was slightly better, as the US CPI increased 5.4% in July 2021 (YoY). Looking at the monthly change, there was a 0.5% rise, down from the last 0.9%.
Looking at EUR/USD, the pair found support near 1.1700, but it is likely to face hurdles. Besides, GBP/USD is likely to remain strong above 1.3800.
- UK GDP Q2 2021 (Preliminary) (QoQ) - Forecast +4.8%, versus -1.6% previous.
- US Initial Jobless Claims - Forecast 375K, versus 385K previous.
- US Producer Price Index March 2021 (MoM) – Forecast 0.6%, versus +1.0% previous.
- US Producer Price Index July 2021 (YoY) – Forecast +7.3%, versus +7.3% previous.