Nzdusd rises 0.47% amid consolidation, US CPI announcement awaited

NZDUSD Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.47%	28.4 Pips
Week to-date	0.58%	35 Pips
June	1.53%	91 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD CPI Inflation Rate (12-mth)

What happened lately

Currently, there are no significant economic news releases impacting the New Zealand dollar or the US dollar. However, it is essential to consider that the NZDUSD currency pair saw an increase of 0.47% to 0.60424 on Monday, indicating a bullish sentiment despite being in a consolidation phase. Consolidation suggests that there is resistance to forming a clear trend direction, with market participants weighing various factors that could influence the pair’s future movements. As there are no major catalysts influencing the market at present, investors are likely focusing on future economic releases and geopolitical events to guide their trading strategies.

Looking ahead, the most significant upcoming event for the USD is the US Consumer Price Index (CPI) inflation rate announcement, scheduled for release on Wednesday at 01:30 PM. The CPI report is a crucial indicator of inflation and can significantly influence market expectations regarding the future path of the US Federal Reserve’s monetary policy. A higher-than-expected inflation rate could lead to increased expectations of further interest rate hikes by the Fed, potentially strengthening the US dollar as investors seek higher returns. Conversely, a lower inflation rate could dampen such expectations, potentially weakening the USD as confidence in the need for tighter monetary policy diminishes.

In terms of its impact on the NZDUSD currency pair, the CPI inflation rate release will likely be the primary focus for traders this week. If the inflation data suggests persistent inflationary pressures in the US, this could bolster the USD, leading to a short-term decline in the NZDUSD as investors favor the dollar’s appeal. Alternatively, if inflation figures come in weaker than anticipated, the USD might face selling pressure, providing upside potential for the NZDUSD pair. It is crucial for traders to monitor this economic release closely, as its outcome could provide the momentum needed for the NZDUSD to break out of its current consolidation phase.

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What can we expect from NZDUSD today?

NZDUSD on Monday rose 0.47% to 0.60424. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for NZDUSD looks mixed as the pair is likely to consolidate above 0.60152 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 0.60651 or trades above daily pivot 0.60402. Break above could target R1 at 0.60673. While to the downside, we are looking at 0.60152 (S1) and daily low of 0.60130 as support levels. NZDUSD need to break on either side to indicate a short-term bias. A break above 0.60651 may suggest continuation after recent positive movement.

For the week to-date, take note that NZDUSD is mixed as compared to the prior week.

Key levels to watch out: