NZDUSD rises, focus shifts to US economic events for guidance

NZDUSD Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.13%	8.1 Pips
Week to-date	0.7%	42 Pips
June	1.61%	96 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD CPI Inflation Rate (12-mth)
Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)

What happened lately

In the United States, two significant economic events are on the horizon, both with high impact potential. On Wednesday, the Consumer Price Index (CPI) Inflation Rate for 12 months is scheduled for release. This key indicator evaluates price changes for a basket of goods and services and is crucial in identifying inflationary trends that could influence the Federal Reserve’s monetary policy decisions. A higher-than-expected CPI might prompt a more hawkish stance, potentially leading to interest rate hikes to curb inflation. Conversely, a lower-than-expected figure could signal a more dovish approach, keeping interest rates stable. On Thursday, the Producer Price Index (PPI) for 12 months, excluding volatile sectors like Food and Energy, will also be released. This metric provides insight into wholesale inflationary pressures, with implications for future consumer inflation as costs could be passed down the line.

In New Zealand, there are no major economic events ahead, leaving the focus on external influences, notably the developments in the United States. With no significant domestic data releases or policy changes on the docket, the New Zealand Dollar’s movement will likely be swayed by global factors, particularly those stemming from its trading partners, such as the US.

The NZDUSD currency pair increased slightly by 0.13% to 0.60505 on Tuesday, indicating a period of consolidation. The absence of major domestic economic news points to an underlying stability in the New Zealand market, but external influences, particularly from the US, could shift this balance. The upcoming CPI and PPI data releases in the US could have a pronounced effect on NZDUSD. If US inflationary data turns out to be stronger than anticipated, this could foster expectations of more aggressive Federal Reserve rate hikes, which would typically strengthen the US Dollar relative to the New Zealand Dollar, potentially pushing NZDUSD lower. Alternatively, if the data suggests weaker inflation, the Fed might delay rate hikes or even cut rates, diminishing the US Dollar’s appeal and potentially boosting the NZDUSD rate higher. Traders in the NZDUSD market will therefore be closely watching these US economic indicators for clues on the direction of this currency pair.

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What can we expect from NZDUSD today?

NZDUSD on Tuesday rose 0.13% to 0.60505. Price is above 9-Day EMA while Stochastic is rising.

Updated daily direction for NZDUSD looks mixed as the pair is likely to consolidate above 0.60325 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.60583 or trades above daily pivot 0.60454. Break above could target R1 at 0.60634. While to the downside, we are looking at 0.60325 (S1) and daily low of 0.60274 as support levels. NZDUSD need to break on either side to indicate a short-term bias. A break above 0.60583 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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