- The Greenback was punished by the US inflation, even if the figures have come mixed.
- NZD/USD is still bullish as long as it stays within the ascending pitchfork’s body, above the lower median line (LML).
- A larger growth could be activated by a valid breakout through the 50% retracement level.
The NZD/USD price rallied in the last minutes signaling strong buyers. The Dollar Index plunged after the US inflation data release, so USD’s depreciation is natural. However, the pair maintains a bullish bias despite the most recent decline. It has come down only to retest the support levels before jumping higher.
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The US Consumer Price Index, CPI increased by 0.5% in July as expected, less than the 0.9% growth registered in June, while the Core CPI has increased only by 0.3%, versus 0.4% estimate.
The Kiwi has taken full control again in the short term. Some poor US data reported on Thursday and Friday could punish the Greenback. The pair is trapped within a range pattern. An upside breakout may signal a bullish reversal.
Tomorrow, the US is to release the PPI, Core PPI, and Unemployment Claims. These economic figures could bring more action on NZD/USD.
NZD/USD price technical analysis: Bulls to get back dominance
As you can see on the H4 chart, the NZD/USD pair is still trapped between the 50% retracement level, 0.7098, and the 0.6922 level. It’s traded at 0.7041 level and is pressuring the 38.2% retracement level.
NZD/USD has found support below the ascending pitchfork’s lower median line (LML) again. It has printed a false breakdown with great separation through the confluence area formed at the intersection between 23.6% and the lower median line (LML).
In the short term, the bias is bullish as long as NZD/USD stays within the ascending pitchfork’s body. If the pair resumes its growth, the median line (ml) and the weekly R1 (0.7079) are seen as upside targets.
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Technically, it was expected to increase after making a valid breakout through the downtrend line. An upside breakout above the 50% retracement level from the current range may announce a bullish reversal, a strong upwards movement.
Only a valid breakdown below the lower median line (LML) could invalidate the bullish scenario and could offer us a potential short opportunity.
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