The New Zealand dollar versus the US dollar (NZD/USD) is currently at 0.7770. In simple terms, 0.7770 USD is equal to 1.00 NZD. In my technical perspective, from September of 2009 to 2010, the forex pair consolidated sideways and formed an inverted head and shoulders on an uptrend. A month after, it broke out from the said pattern until it reached a 2-year high of 0.7975. Then it declined, found some support at the head and shoulders’ neckline and bounced back up to where it currently is. Tomorrow will be crucial for the New Zealand dollar as the data on their country’s Consumer Price Index (CPI) will be released. New Zealand’s previous CPI was 1.1% and the forecast for tomorrow from various sources will be around 2%.
The NZD/USD has its 22-month uptrend intact and standing above the 50 and 100-period moving averages which indicates the bulls are taking over. There could also be an ugly looking symmetrical triangle pattern. Given the upside potential of this formation. If we get the size of the base of this triangle and add it up to the possible breakout point, we could get a target price which could hit the 0.8214 all-time high. However, before NZD/USD reaches that, it first needs to surpass the 0.7975 resistance. On the flip side, in case this currency pair drops, the significant support could be the 22-month uptrend. If it further breaks below that level, it could fall until it finds some support around the neckline of the inverted head and shoulders. In logical terms, if the triangle pattern fails or whatever pattern shows up and disappoints, as long as the uptrend remains intact, I’d stay bullish on the NZD/USD and revisiting its all-time high would be easy.