New Zealand CPI (QoQ) in Q1 2014 came at 0.3% vs 0.5% expected and 0.1% last, while the yearly result came at 1.5% vs 1.7% exp and 1.6% last.
While the data should not alter the RBNZ plans to further tighten monetary policy, with the economy booming and key economic indicators at very healthy levels, it sends a cautionary message to NZD perma bulls that perhaps the central bank may afford some delays in additional hikes this year until CPI readings pick up again.
Technically, the AUD/NZD is a 5th wave from a triple bottom found through March 12-19 at 1.0550. If buyers are to make further progress, the 1.0870 up to 1.0930 provides formidable resistance, with only clearance of this latter opening the doors for a potential retest of 1.10 round number. For such scenario to occur though, a catalyst needs to be present, which could come today on positive China data or else not until next week's Australian CPI report. On the downside, as long as buyers keep 1.0730/40, the construcitve outlook remains, all within the context of an underlying downtrend with a 1.0550/1.0930 range developing.
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