NZD/USD does not appear to benefit from NZ planned lockdown lift and upbeat CPI data...
Yesterday (April 20), the New Zealand dollar outperformed other major currencies against the dollar, gaining 0.2% compared to the previous session. New Zealand Prime Minister Jacinda Ardern said the country's level 4 lockdown would end within a week, as key sectors would resume operations. Meanwhile, a day earlier, government data showed that consumer price inflation in New Zealand grew 2.5% year-on-year in the first quarter, the strongest since 2011 and higher than the 2.1% expected growth.
However, the performance of the NZD/USD, which is widely regarded as a commodity coupling, does not look convincing so far this week, as the recent drop in oil prices has dampened sentiment in the commodity-linked currencies.
From a technical point of view, the long-term outlook for the NZD/USD is still tilted to the downside as seen on the daily chart. The pair is trading in a bearish wedge pattern, while the upside is likely to be limited by a falling trend line drawn from December last year. Below the closest resistance is at 0.6260, and the break-down from the wedge indicates that it is likely to head lower to the first and second supports at 0.5840 and 0.5690, respectively. In an alternative scenario, a break above 0.6260 may open the way to the intra-March high of 0.6450 on the upside.