Forex analysis of the New Zealand franc pair

Fundamental analysis:

The new franc pair rose during trading on Tuesday for the second day in a row, especially as Swiss inflation fell again in December, indicating further interest rate cuts by the Swiss National Bank this year, and may start with a 25 basis point cut in March.

Consumer price inflation fell to 0.6% in December, in line with expectations, down from 0.7% in November.

However, the New Zealand dollar has found some support from strong services activity data as well as additional supportive measures from China, New Zealand's largest trading partner.

But local factors continue to put pressure on the currency amid expectations of aggressive monetary easing by the Reserve Bank of New Zealand.

The Reserve Bank of New Zealand is expected to cut the cash rate of 4.25% by 50 basis points at the next February meeting.

At the technical level:

The new franc pair rose strongly inside the ascending price channel on the four-hour frame, as the pair is trying to form a harmonic bat pattern that will be near the levels of 0.5160 and around.

It is expected that the pair will start to decline after reaching the upper limit of the channel and completing the harmonic pattern shown in the graph.

We then target the lower boundary levels of the price channel as an initial target and then the support levels of 0.5085.

It should be noted that the rise can be extended towards the levels of the main downtrend on the daily frame approximately at 0.5180/90.

This scenario fails in the event that the downtrend levels break through and close above the one-day candle almost above the 0.5200 levels.