NZD/USD: awaits key US data releases, can the bird catch a bid again?
- NZD/USD looks to US data this week for major catalyst.
- Can the bulls recover back into an ascending trendline?
NZD/USD has been stuck to a narrow range in early Asia today after an equally quiet start in European trade before a slightly better volatility environment in the US session. Currently, NZD/USD is trading at 0.7321, up 0.03% on the day, having posted a daily high at 0.7331 and low at 0.7314.
The US session opened near 0.7345 before the bears took a hold of the Kiwi's tail on the back of a rally in UST yields with the US dollar better bid on the session. The bird in fact dropped below the 10-DMS to close near 0.7310 for the session.
Key US events line-up - ANZ
Recent data ahead of FOMC
The data, on the other hand, was significant from the US as we head into the FOMC’s assessment of inflation, the December personal spending was higher by 0.4% for m/m while the headline PCE inflation rose 0.1% m/m (+1.7% y/y). The Core PCE rose 0.2% m/m and 1.5% y/y. While from NZ, a solid export performance boosted the overall trade balance in December but the Kiwi did not even flinch.
NZD/USD CPI did matter
Casting minds back to data that did really matter, the CPI data was a big disappointment. The Dec qtr CPI rose by +0.1%/qtr, below TD at +0.3% and well below market at +0.4/+0.5%, and below that expected by the RBNZ in Nov (+0.3%).
NZD/USD levels
NZD/USD's blue sky rally has been capped, with plenty of downside on the cards still. A break lower below the 0.73 handle looks to the 16th Jan double bottom of 0.7230/40 guarding 0.7120. To the upside, bulls need to be clearing 0.7450 previous top of H&S shoulders that then opens 0.7520 July 2017 highs.