FxWirePro: NZD/USD Deflates from 0.6840 Levels on RBNZ Inflation Expectations
- NZD/USD sold-off following the release of New Zealand’s RBNZ Q2 inflation expectations gauge.
- Kiwi bulls unimpressed 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.
- The pair deflates from 0.6840 levels to currently trade around 0.68. Strong trendline support located at 0.6740, weakness only on break below.
- Ongoing rally in the oil prices continues to offer some support to the major.
- Our previous call (http://www.econotimes.com/FxWirePro-NZD-USD-recovers-from-session-lows-at-06746-good-to-buy-breakout-above-06770-208474) has almost hit all targets.
- We advise booking full profits. 0.6847 (double top) is strong resistance. Further gains only on break above.
- Focus on US CPI and industrial production data due later in the NY session, followed by Fonterra’s fortnightly dairy action results for direction in the pair.