NZD/USD – trims gains, trades around 50% Fibo

NZD/USD pair trimmed gains to trade around 0.7138 levels (50% of 0.6675-0.7325) after a private gauge of inflation in the New Zealand dropped for the first time since May 2015.

Offered at 0.7159

The spot was offered at a high of 0.7159 levels. The bullish tone around NZD seen on Monday was slightly surprising since markets expect RBNZ to cut rates this week.

However, the bullish tone ran out of steam after ANZ’s July inflation measure dropped 0.3% m/m, adding to speculation the bank will be forced to adopt a stronger dovish language. The spot was last seen trading around 0.7138 levels.

NZD/USD Technical Levels

Acceptance below 0.7138 (50% of 0.6675-0.7325) would open doors for a drop to 0.7094 (38.2% of 0.7325-0.6951). A violation there could yield 0.7076 (38.2% of 0.6675-0.7325). On the other hand, a break above 0.7171 (23.6% of 0.6675-0.7325) would open doors for 0.7201 (Aug 4 high), above which the spot could target 0.7237 (76.4% of 0.7325-0.6951).