NZD/USD: shooting up 40 pips on the CPI data beating expectations

Currently, NZD/USD is trading at 0.7044, up 0.59% on the day, having posted a daily high at 0.7047 and low at 0.7000.

NZD/USD has shot up to test the vicinity of the 17th April highs of 0.7035 and has pushed on through to aforementioned lows on the knee jerk with yesterday's highs now in sight at 0.7046. The CPI data was stronger than expected and thus markets have got on the bid. However, given the RBNZ's recent explicit announcement in March that it is discounting the impact of “one-offs”, the initial bid could be a fade here considering the RBNZ is in no hurry to raise rates and is rather relying on macroprudential measures to cool housing as it waits and watches, as noted by analysts at ANZ before the data was released. 

New Zealand Consumer Price Index (QoQ) registered at 1% above expectations (0.8%) in 1Q

NZD/USD levels

The 17th April highs of 0.7035 were broken again and the next key area of resistance comes as 0.7060/70 around the 200-d ema (0.7069). There is a double bottom at 0.7130 as the mid-Feb lows.  On the downside, 0.7000 psychological level guards 0.6933/50 and 13th March resistance come as first support. A break of the 0.69 handle opens up the 0.6885 mark as being the recent lows guarding 0.6675 as the 29th May 2016 on a break of the 0.67 handle.