NZD/USD: 0.7350 tested on Trump’s health care failure, flat CPI

The NZD/USD pair has entered a phase of upside consolidation over the last hour, after having staged a solid rebound towards the mid-point of 0.73 handle from NZ CPI-led slump.

NZD/USD: Will it surpass 0.7350?

The Kiwi reversed entire NZ CPI data-led slide and returned to NY tops reached yesterday at 0.7350 levels, before meeting fresh supply to now trade around 0.7335 levels, still up +0.20% on the day.

The renewed uptick seen in NZD/USD can be mainly attributed to a slump in the US dollar seen across the board, after the US Senate Republicans rejected the Obamacare repeal bill yet another time.

Earlier today, the spot plunged to 0.7264 lows after New Zealand’s CPI report disappointed markets, coming in at 0.0% versus 0.2% expectations and 0.1% last. Poor CPI figures were way below RBNZ’s forecasts and hence, poured cold water on RBNZ rate hike expectations for mid-2018.

Also, yesterday’s RBNZ deputy governor Bascand’s comments continue to remain a drag on the prices, as markets ignored better-than expected China’s GDP data. All eyes now remain on the fortnightly Fonterra’s dairy auction results for fresh impetus on the Kiwi.

NZD/USD Levels to consider                                                                              

NZD/USD holds well above 0.7300, with a break above 0.7347/50 (daily high/ NY top) could open doors for a test of 0.7376 (Feb 7 high). To the downside lies 0.7216 (50-DMA) still guarding 0.7183 (Jun 15 low) and a break back below 0.7150 (psychological levels) are key near-term downside areas.