Nzdusd rises ahead of key inflation data releases and central bank events

NZDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.18%	10.1 Pips
Week to-date	0.07%	3.8 Pips
February	0.26%	14.8 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD CPI Inflation Rate (12-mth)
Wed 01:30 PM USD CPI Inflation Rate excluding Food and Energy sectors (12-mth)
Wed 03:00 PM USD Federal Reserve Chair Jerome Powell testifies
Thu 02:00 AM NZD RBNZ Survey of Inflation Expectations (3-mth)
Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)

What happened lately

In the United States, attention is focused on upcoming releases and events that could significantly influence the financial markets. On Wednesday, the Consumer Price Index (CPI) Inflation Rate and its variant excluding food and energy sectors are slated for release, both of which carry high significance. These metrics are critical as they provide insights into the inflation trajectory, which can influence Federal Reserve policy. Additionally, Jerome Powell, the Federal Reserve Chair, is scheduled to testify, which market participants will scrutinize for signals regarding future monetary policy actions. On Thursday, the Producer Price Index (PPI) excluding food and energy will be released, which can further contribute to understanding inflation dynamics.

In New Zealand, the Reserve Bank of New Zealand’s (RBNZ) survey on inflation expectations is scheduled for release on Thursday. This survey is of high importance as it can provide insights into the anticipated inflation trajectory over the next three months. Inflation expectations are a crucial component for central banks to set interest rates, as they aim to maintain price stability and guide monetary policy.

The recent 0.18% rise in NZDUSD to 0.56512 indicates positive sentiment towards the New Zealand dollar against the US dollar. However, given the impending significant economic releases and events related to inflation metrics in both the US and New Zealand, market participants may witness heightened volatility. For the NZDUSD pair, unexpected inflation data from the US could either bolster or weaken the US dollar depending upon whether the results indicate stronger or weaker inflation pressures. Similarly, the RBNZ’s inflation expectations survey will be closely watched; an expectation of elevated future inflation could lead to a strengthening of the NZD as it may hint at potential monetary tightening by the RBNZ. Traders and investors should prepare for potential fluctuations in the currency pair based on these data points and statements from central bank leaders.

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What can we expect from NZDUSD today?

NZDUSD on Tuesday rose 0.18% to 0.56512. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for NZDUSD looks bullish as the pair ended higher after Tuesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 0.5665 with break above could target R2 at 0.56787 or figure level area. While towards the downside, we are looking at daily low of 0.56289 as an important support. Break below this level could weaken the current bullish momentum. A break above 0.56607 may suggest continuation after recent positive movement.

For the week to-date, take note that NZDUSD is mixed as compared to the prior week.

Key levels to watch out:

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