NZD/USD Sold-Off Near 50-DMA on RBNZ Inflation Expectations

NZD/USD Sold-Off Near 50-DMA on RBNZ Inflation Expectations

The ongoing bullish momentum in the NZD/USD pair met fresh supply near 50-DMA at 0.6844, following the release of New Zealand’s RBNZ Q2 inflation expectations gauge.

NZD/USD deflates from 0.6840 levels

Currently, the NZD/USD pair rises +0.38% to 0.6809, retreating sharply from 0.6841 daily tops printed just ahead of the NZ data release. The NZD/USD pair came under fresh selling pressure and trimmed nearly a quarter of the latest rally, as the bulls were left unchanged by a slightly better RBNZ Q2 2-year inflation expectations reading, coming in at 1.64% versus 1.63% last.

However, the gauge remained at the second lowest levels since June quarter in 2014 and weighed heavily on the sentiment around the NZD. Further, missed trading on the Asian equities, with the Chinese indices extending losses, also collaborates to a renewed bout of selling interest seen in the Kiwi over the last hour. Meanwhile, the ongoing rally in the oil prices continues to offer some support to the major.

With the NZ inflation data out of the way, markets now await the US CPI and industrial production data due later in the NY session, followed by Fonterra’s fortnightly dairy action results for next direction on NZD/USD.

NZD/USD Levels to consider

To the upside, the next resistance is located at 0.6841/44 (Daily high/ 50-DMA), above which it could extend gains to 0.6862/0.6900 (20-SMA/ round number). To the downside immediate support might be located at 0.6788/80 (1h 50-SMA/ daily pivot) and from there to at 0.6725 (100-DMA).