NZD/USD Turns Back to 0.6800 Handle, US CPI Eyed for Further Direction
A fresh bout of selling pressure extended the NZD/USD
pair's reversal from early morning highs of 0.6841, which was driven by
a slightly better RBNZ's Q2 2-year inflation expectations.
Earlier during Asian session, the Reserve Bank of New-Zealand's (RBNZ) inflation expectations survey held y/y inflation expectations for Q2 unchanged at 1.6%. However, Q2 2-year inflation expectations at 1.64% bettered previous reading of 1.63% while 1-year outlook reading came-in at 1.22% versus 1.09% previously estimated.
Bulls, however, seemed unimpressed by the reading and the pair erased majority of its gains to drop back to 0.6800 handle as investors now await the release of US CPI data in order to determine the next leg of move for the pair.
Moreover, the pair is reversing from the neighborhood of 50-day SMA and hence a follow through weakness below 0.6800 level might turn the pair vulnerable to resume its near-term downward trajectory.
Technical levels to watch
Below 0.6800 level, the pair could be headed back towards recent closing lows support near 0.6760 area and the downward momentum could further get extended towards 100-day SMA support near 0.6725-20 region.
On the upside, the pair needs to regain momentum above 0.6815 horizontal resistance before attempting a fresh move towards 50-day SMA resistance near 0.6840-45 area. A clear strength above 50-day SMA has the potential to lift the pair back towards 0.6890-0.6900 round figure mark resistance area.