The movement of the New Zealand dollar stole the spotlight in early market opening trading this week with the release of New Zealand inflation data at the start of the Asian session.
New Zealand's consumer price index (CPI) showed an inflation reading that jumped to a 32 -year high, and is seen as continuing to support monetary policy tightening measures already underway by the central bank.
Although the Reserve Bank of New Zealand (RBNZ) raised interest rates by 50 basis points last week, the Kiwi dollar failed to maintain an excellent performance against the US dollar which put pressure to hit its latest 2 -year low.
The US dollar remained dominant in a risky market environment last week, but began to depreciate again over the weekend giving way for the NZD dollar to rise again.
On the price chart of the NZD/USD pair, it can be observed that the price has slipped to its latest 2 -year low reaching around 0.60600 last Wednesday.
However, there was a reversal pattern of price reversal after the increase displayed over the weekend following the price moving above the Moving Average 50 (MA50) support level on the 1 -hour time frame on the NZD/USD chart.
Continuing with the market opening earlier this week, prices soared at the beginning of the Asian session this morning after the release of New Zealand inflation data until the price reached a high of 0.62000.
However, the price momentum was somewhat shaky with the price showing a decline again from that high level continuing to the beginning of the European session towards the 0.61500 zone.
If the price still manages to hold above the support level of MA50, it is likely that a higher rise has the potential to continue the price reaching back to the level of 0.62000.
Breaking the resistance will push the price to a higher level with the target testing the focus zone around 0.69500.
On the other hand if the price continues to fall lower, a decline below the 0.61000 level will expect the price to overcome last week’s lows at 0.60600.
And the price is likely to continue the bearish trend with the target for further movement could reach up to around 0.59300.
