The New Zealand Dollar (NZD) fell against the American counterpart in Asia on Friday, dragging the price of NZD/USD pair to less than 0.6830 despite the release of better than expected CPI figure for New Zealand which shows inflation staying near the 16-year low. The technical bias already remains bullish because of a Higher High and Higher Low in the ongoing move.
As of this writing, the pair is being traded around 0.6827. A hurdle may be noted near 0.6897-0.6900 which is the confluence of psychological number as well as swing high of the last major upside move on the four-hour timeframe. A break and four-hour closing above the 0.6900 territory could incite renewed buying interest, validating a move above the 0.7000 zone.
On the downside, the pair is likely to find a support around 0.6757, the 50% fib level ahead of 0.6618, the swing low of the last major downside move as demonstrated in the above chart. The technical bias will remain bullish as long as the 0.6618 support area is intact.
The Statistics New Zealand said the consumer price index (CPI) rose 0.4 per cent in the year to September 30, the same increase as the year to June 30.
The CPI is the recognised measure of general household inflation, using changes in pricing of a theoretical basket of goods bought by households.
A fall in petrol prices and a large increase in council rates has seen inflation stay anchored near a 16 year low in the year to September.
Considering the overall technical and fundamental outlook, selling the Kiwi dollar around current levels could be a good strategy if we get a valid bearish reversal candle on the daily chart.
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