NZD/USD: bulls looking for a break of 200-W SMA, bearish below it
- NZD/USD: bird catches a CPI miss bid and extends the minor recovery from the new trend lows.
- NZD/USD: bearish below the 200-month SMA at 0.6980.
NZD/USD bulls struggle to gain traction within this minor correction from a touch above 0.69 the figure despite a downturn in the dollar after today's CPI disappointments and what might have been perceived as a dovish rhetoric from the RBNZ in early Asia. Currently, NZD/USD is trading at 0.6965, down -0.27% on the day, having posted a daily high at 0.6984 and low at 0.6903.
NZD/USD made a fresh five-month low in early European markets as markets weighed in on the RBNZ outcome where they left the interest rate unchanged with a dovish outlook for the monetary policy saying “we expect to keep the OCR at this expansionary level for a considerable period of time”. The pair dropped from 0.6984 down to 0.6932 before further supply tipped the bird over the edge to aforementioned lows. However, a quick bid followed on broad dollar weakness, with the Kiwi leading the pack. The pair rallied to 0.6937 before the CPI data arrived sending the bird higher to the aforementioned highs.
US CPI
US CPI has sent the DXY down to a low of 92.5410, although it had traded at 93.16 as the session high. The CPI data arrived at +2.5% vs +2.5% y/y expected, beating the prior 2.4%. But ex food and energy +2.1% y/y vs +2.2% y/y expected vs +2.1% y/y prior. For the month, CPI arrived at 0.2% vs 0.3% expected. The numbers are decelerating and the three-month annualized core CPI reading is below 2%.
NZD/USD levels
NZD/USD was sold off heavily after the Fed RBNZ and prior to this RBNZ meeting where the decline from 0.7436 was extended down to 0.6902, (a new trend low). The NZD/USD has dropped below the key 200-month moving average support at 0.6980 and technicals stay bearish with RSIs biased to the downside longer term, although stabilising out of oversold territory - pointing to a period of consolidation. To the downside, 0.6948 guards 0.6880.