NZDUSD has been trending higher, forming higher lows above a rising trend line on its hourly time frame. Price might be in for another test of this support area soon.

This lines up with the 61.8% Fibonacci retracement level and 100 SMA dynamic inflection point, which adds to its strength as a floor. Price is testing support at the 38.2% Fib currently but might still dip to the 50% level to gather more bullish energy.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that support is more likely to hold than to break. Stochastic is already dipping into the oversold region to signal exhaustion among sellers, so turning higher would confirm that buyers are ready to return.

If that happens, NZDUSD could resume the climb to the swing high at .6925 or higher. RSI has some room to head south before indicating oversold conditions, so selling pressure could stay in play for a bit longer.

There are no major reports due from New Zealand this week while the US has its CPI readings coming up. Analysts are expecting to see a stronger headline figure of 0.8% versus the earlier 0.6% uptick and an increase of 0.5% for the core figure.

However, the bigger market drivers these days have been geopolitical tensions and commodity prices. These have been pulling the Kiwi apart in opposite directions, as the prospect of more conflict is weighing on higher-yielding currencies. At the same time, higher commodity prices are lifting the commodity currency.

Risk-off flows could still come strongly in play over the next few days, especially since the US just announced an embargo on Russian oil and gas. This could mean more aggression from Putin, which might drive up demand for safe-haven assets like the dollar.