The New Zealand dollar edged down against the US dollar on Friday as investors eased somewhat higher after soaring to its highest level since June 8 in the previous session.

The Kiwi surged on Thursday after the government signaled consumer inflation jump to its highest level in a decade. This sparked an initial reaction to the upside, but sellers stepped in as the news likely incorporated during the currency’s recent sixteen-session rally.

On Friday, the NZD / USD stood at 0.7151, down 0.0007 or -0.10%.

The Reserve Bank (RBNZ) hiked rates earlier this month and announced further tightening ahead as it seeks to keep inflation near its target range of 1-3% and cool a real estate market boiling.

Bullish traders have bet on more RBNZ rate hikes, but the strength of the CPI in the third quarter is likely reinforcing a more aggressive bull cycle.

NZD / USD daily

Technical analysis of the daily swing chart

The main trend is up on the daily swing chart, however, momentum fell on Friday following confirmation of the previous session’s closing price reversal high.

A trade up to .7219 will cancel the reversal top of the closing price and signal a resumption of the uptrend. The main trend will change downward on a trade to 0.6860. This is highly unlikely, but there is room for a 2-3 day correction in a series of 50% levels.

The first support is a long term Fibonacci level at 0.7121. This is associated with a 50% level at 0.7061. The next support is a pair of 50% levels at .7027 and .7012.

Short term outlook

A closing price reversal does not change the main downtrend, but it could lead to a 2-3 day correction designed to alleviate some of the extreme upward pressure.

Additionally, now that the news is on higher inflation and an aggressive rate hike for the RBNZ, traders may not feel the need to look for higher prices. Instead, they will likely look for value, which could lead to support levels falling to .7061, followed by .7027 to .7012.

The next major move is also expected to be fueled by the Federal Reserve after making its monetary policy decisions on November 3.

For an overview of all of today’s economic events, check out our economic calendar.

This article originally appeared on FX Empire

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