News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true.Simplify your trading strategy with these four indicators here:https://t.co/A4dqGMPylo https://t.co/xqbUxwWgTZ
  • An economic calendar is a resource that allows traders to learn about important economic information scheduled to be released. Stay up to date on the most important global economic data here: https://t.co/JdvW6HNuqV https://t.co/Gi8LHCT5sB
  • The AB=CD pattern is simple once you know how to spot it and draw the proper Fibonacci retracements. Make your trading strategy as simple as ABCD here: https://t.co/AKmlmaAZBS https://t.co/FFmRYyx4ou
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/r7aJb4qpqc
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/ERyiY47G5H https://t.co/fIGDaDW21V
  • ...even more incredible is net speculative futures positioning in $EURUSD, rounding off from a record net long position...and it hasn't even cleared 1.20... https://t.co/SfyYTMTT1x
  • Net speculative futures positioning in the Dollar (here overlaid with the $DXY) has pushed to extreme levels commensurate to the levels in Oct 2017 and April 2018 https://t.co/JqHGgVUCqc
  • The $SPX closed below the 50-day moving average Friday. The first time it has done so in 103 trading days. The 'technical' end of an exceptional run: https://t.co/HUn5Q6JmlK
  • Despite recent weakness in the #SP500, the growth-linked New Zealand Dollar has been gaining momentum ahead of the #RBNZ next week Could this trend continue, or will $NZDUSD capitulate to the mercy of risk trends? Check out my fundamental outlook - https://www.dailyfx.com/forex/fundamental/forecast/weekly/nzd/2020/09/19/New-Zealand-Dollar-Outlook-NZDUSD-May-Rise-on-RBNZ-Watch-SP-500.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/34vcR4fjpT
  • RT @FxWestwater: #Copper rose to a fresh multi-year high as Chinese demand and supply-side issues continue to support price action amid a l…
Uptick in New Zealand Consumer Price Index (CPI) to Fuel NZD/USD Rebound

Uptick in New Zealand Consumer Price Index (CPI) to Fuel NZD/USD Rebound

2018-10-15 19:30:00
David Song, Strategist
Share:

Trading the News: New Zealand Consumer Price Index (CPI)

Updates to New Zealand’s Consumer Price Index (CPI) may fuel the recent rebound in NZD/USD as the headline reading for inflation is expected to widen to 1.7% from 1.5% per annum in the second-quarter of 2018.

Image of DailyFX economic calendar

Signs of stronger price growth may heighten the appeal of the New Zealand dollar as it puts pressure on the Reserve Bank of New Zealand (RBNZ) to lift the official cash rate (OCR) off of the record-low, and the central bank may start to change its tune at the next meeting on November 7 especially as ‘GDP growth in the June quarter was stronger than we had anticipated.’

However, a below-forecast print may rattle NZD/USD as it encourages the RBNZ to carry the wait-and-see approach into 2019, and Governor Adrian Orr & Co. may keep the door open to further support the economy as ‘downside risks to the growth outlook remain.Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

Impact that the New Zealand CPI report has had on NZD/USD during the last release

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

2Q

2018

07/16/2018 22:45:00 GMT

1.6%

1.5%

+16

+15

2Q 2018New Zealand Consumer Price Index (CPI)

NZD/USD 15-Minute Chart

Image of nzdusd 15-minute chart

New Zealand’s Consumer Price Index (CPI) picked up during the three-months through June, with the headline reading climbing to 1.5% from 1.1% per annum in the first-quarter of 2018. A deeper look at the report showed the weakness was led by a 5.6% decline in the cost for fruits/vegetables, with prices for clothing also narrowing 1.2% from the previous year, while transportation costs increased another 2.0% on the back of higher energy prices.

Household spending in New Zealand increased 0.1% during the first three-months of 2018, with the previous reading revised down to reflect a 1.4% expansion versus an initial reading of 1.7%. A deeper look at the report showed demand for electrical goods increasing 5.4%, with sales of furniture/housewares climbing 2.4%, while discretionary spending on clothing/footwear narrowed 5.0% during the same period.

NZD/USD bounced back from 0.6755 region despite the below-forecast print, with NZD/USD largely holding steady throughout the remainder of the day as the exchange rate closed at 0.6783. Learn more with the DailyFX Advanced Guide for Trading the News.

NZD/USD Daily Chart

Image of nzdusd daily chart
  • Broader outlook for NZD/USD remains tilted to the downside as both price and the Relative Strength Index (RSI) track the bearish formations from earlier this year, but the lack of momentum to break below the 0.6370 (50% retracement) to 0.6430 (78.6% expansion) hurdle raises the risk for a near-term rebound.
  • In turn, the 0.6600 (23.6% retracement) to 0.6630 (78.6% expansion) region sits on the radar as it largely lines up with channel resistance, with a break of the bearish structure raising the risk for a change in NZD/USD behavior.
  • Next topside region of interest comes in around the former-support zone around 0.6710 (61.8% expansion) to 0.6720 (61.8% expansion) followed by the Fibonacci overlap around 0.6780 (100% expansion) to 0.6790 (50% expansion).

Additional Trading Resources

New to the currency market? Want a better understanding of the different approaches for trading? Start by downloading and reviewing the DailyFX Beginners Guide!

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader series on how to effectively use leverage along with other best practices that any trader can follow.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES