NZD/USD: back to close gap after CPI

NZD/USD has been a volatile display at the start of Asia this week. We have had both the Doha story creating turmoil across the board and just recently, the keenly awaited CPI was released from New Zealand, beating expectations and sending the bird back to close the bearish opening gap. 

Oil collapses after no Doha deal

The data arrived as New Zealand Q1 CPI arriving at 0.2% q/q vs 0.1% expected and -0.5% last. Year on year came in line with expectations at +0.4% and 0.1% previous. While the result is not hugely supportive of the nation being able to achieve the RBNZ's target of 1-3% this year, this result will alleviate some of the immediate pressures on the Central bank to act at next week's meeting, but does not, by any means, mean that the Bank will not cut again next week. 

“Some further policy easing may be required over the coming year to ensure that future average inflation settles near the middle of the target range,” Reserve Bank Governor Graeme Wheeler said at the last meeting in Wellington after leaving the official cash rate at 2.5 percent. 

NZD/USD levels

NZD/USD is choppy around the 0.69 handle and back to being just -0.2% down on the day at the time of writing after printing lows as deep as 0.6845 on the opening bearish gap. R1 is located at 0.6968 and R2 at 0.6985 ahead of R3 located at 0.7003. Meanwhile the price remains within a bullish ascending channel from the low is 2016 at 0.6347 having topped at 0.6966 on the 30th March. The next key support comes as the 20 dma at 0.6824.