EURNZD is forming a small double bottom visible on its hourly time frame, indicating that a reversal from the earlier drop is due. At the same time, price is finding support at a rising trend line that’s been holding all month.

This lines up with the 61.8% Fibonacci retracement and 200 SMA dynamic inflection point, which makes it a strong floor. Price looks ready to break past the neckline of the double bottom around the 1.6200 major psychological mark, clearing the way for a move to the swing high around 1.6360.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. However, stochastic is already approaching the overbought zone and looks ready to move south, reflecting a return in selling pressure.

RSI has more room to climb, so buyers could stay in control for a bit longer before overbought conditions are met.

The upcoming release of eurozone flash CPI estimates might be a catalyst for a big move, especially if the actual figures hit or miss expectations. So far, forecasts are looking grim since the Spanish preliminary CPI fell short of estimates.

The headline CPI is slated to climb from 7.4% to 7.5% while the core version might tick higher from 2.9% to 3.2%. These could be enough to boost hopes that the ECB could start withdrawing stimulus measures sooner than previously expected.

There are no major reports lined up from New Zealand for the rest of the week, so Kiwi price action could hinge mostly on market sentiment. Risk appetite could favor the higher-yielding commodity currency, especially if tensions between Russia and Ukraine subside.

Other factors that might impact market sentiment include the release of US advanced GDP data and the core PCE price index.