FxWirePro: NZD/USD Deflates from 0.6840 Levels on RBNZ Inflation Expectations

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. 

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