NZDUSD is testing the downward trend from early 2021 once again. As indicated in our article in late May, the latest test was unsuccessful, and the Kiwi fell sharply. However, the latest bottom was above the one in October 2023. The inability to fall to the lower line of the trend channel and the formation of a higher low might be a bullish signal. 

(NZDUSD Daily Chart) 

This week will be a busy one for Kiwi traders. Today, Powell will testify in the Senate, followed by his testimony in the House tomorrow. With the upcoming Reserve Bank of New Zealand meeting and the US CPI and PPI prints on Thursday and Friday, NZDUSD might have enough data to make a move on key supports or resistances. 

The RBNZ will likely maintain its hawkish stance, at least until the August meeting when forecasts will be updated. Markets expect Powell to remain dovish after his latest talk at Sintra. It might come down to the CPI print to decide the direction. 

(NZDUSD Daily Chart) 

NZDUSD is testing the upper line of the trend channel but has also formed a reverse head and shoulders pattern below the 0.6225 neckline. The 0.6225 level is just above the key trendline and can be used to trap trigger-happy bulls into a fake breakout from the downtrend. However, in the case of a real breakout above both the trendline and the neckline, 0.6370 and 0.65 might become the next targets. 

For downward moves, the key level to watch is 0.6050. If the price retreats below this support, the down moves might extend towards 0.59, where the Kiwi bear might test the upward momentum inside the downward trend channel.