Forex technical analysis: NZDUSD back testing topside ceiling area

Price whips around today. Lower CPI offset by USD selling

The NZDUSD fell sharply after worse than expected CPI data at the start of the trading day. That sent the price below 0.7298 (call it 0.7300) That area was a dividing line for bullish above and bearish below. The price went below.

The Asian session move lower took the price to the underside of the broken trend line but more importantly for the bulls, was the move back above the 0.7300 level. Moving back above that level helped the buyers ignore the CPI data. Plus the Washington headlines were helping the buyers as well. The rally was on.

What now?

We are now testing the highs from last week at the 0.7367 area. The high on Thursday was at 0.73673. The high on Friday peaked at 0.73646. Yesterday the high could only get to 0.73598. We just reached 0.7366 and trade at 0.7357 currently. Sellers are trying to keep a lid on the rally.

Taking a longer look at the daily chart, the 0.7362 to 0.7379 area (yellow area in the chart below), has been home to swing highs going back to August 2016. IN September 2016, there was a spike above that took the price to a high of 0.74847. That break lasted 3 days. In November, there was another break above the yellow area for 1 day and failed. That high reached 0.74028. So the entire yellow area is being tested. A move above will be more bullish of course.