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The  New Zealand dollar  hit new highs against the greenback, mostly due to the latter’s weak performance. CPI is the main event this week. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

Business confidence remained stable at 23 points  according to NZIER and so did the business NZ manufacturing index. This  countered yet another slide in milk prices, by 3.6%. However, underwhelming retail sales, poor industrial output and disappointing housing figures hit the greenback hard across the board, allowing for NZD/USD  a move above 0.77.

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

NZD USD technical analysis April 20 24 2015 kiwi dollar fundamental outlook sentiment and levels

  1. CPI:  Sunday, 22:45. Just as the markets open, we get a figure that could impact trading for the full week.  Price stability is the main role of the central bank and in New Zealand this number is published only once per quarter. After a slide of 0.2% in Q4 2014, mostly due to plunging oil prices. Another fall of the same magnitude is expected now.
  2. Visitor Arrivals: Wednesday, 22:45. Tourism plays a  significant role in the country’s economy. A  m/m rise of 6.9% was seen in February, which is mid summer. A drop is expected now.
  3. Credit Card Spending: Thursday, 3:00. With official retail sales data released only on a quarterly basis, this measure of the widely used plastic cards gives an indication of the New Zealand consumer. An annual  rise of 5.8% was seen in February and a  similar  outcome is on the cards now.

NZD/USD  Technical  Analysis

Kiwi/dollar  started off the week with a slide, but this was short lived. A gradual rise followed with the round level of 0.77 (mentioned last week) proving to be a harder nut to crack.

Live chart of NZD/USD:

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Technical lines, from top to bottom:

We start from higher ground this time. The very round level of 0.80 looms above, but is closely followed by 0.7975, which played a role in the past. 0.7850  is the next important level after caping the pair in December.

The round level of 0.78 played a role in the past and is high resistance. IIt is followed closely by 0.7765 which capped the pair late in 2014.

The round level of 0.77 proved its strength in March 2015 and capped the kiwi’s ascent. Below, 0.7665 is lower resistance, after having this role in December.

0.7615 now works as resistance after providing support during January 2015. It is followed closely by 0.7585 which capped the pair on an initial recovery attempt. Another line to watch out for is 0.7550, which separated ranges in March 2015.

The very round  number of 0.75 capped the pair just before the big fall and serves as strong resistance. It is followed by 0.7450 that had a role in the past.

The next line is 0.7370, which was a low point in 2011. It is followed by 0.7325, which capped the pair in the middle of 2010.

The recent 2015 low of 0.7235 is  now the next  support line. It is followed by 0.7180 that served as resistance back in 2010.

I remain  bullish  on  NZD/USD

The New Zealand economy is likely to continue shining and the kiwi has reasons to rise on its own, even if the US dollar stops sliding.

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