NZ CPI arrives in line with expectations, kiwi flat

Ahead of today's core inflation data for New Zealand, which is due today at 0300 GMT, we have seen the release of the Consumer Price Index for the first quarter of the year arrive in line with expectations as follows:

CPI 0.8% QoQ vs the expected 0.8% QoQ and the previous 0.5%.

For the year, it arrived at 1.5% vs the prior 1.% and in line with expectations. 

NZD/USD is unchanged on the data at 0.7174. 

The bird has already had a good run of things of late, as per the analysis on the 1-hour chart of the prior sessions as follows:

Prior analysis, NZD/USD, 1-hour chart

So far, there is strong resistance on bullish attempts, but the price is holding at a 38.2% Fibonacci confluence that meets prior resistance structure looking left.

The bulls can continue to monitor for bullish price action and structure on a lower time frame for an optimal entry:

30-min chart

Live 1-hour market, take profit achieved

As illustrated in the hourly chart above, the price went on to make a higher high.

However, the price has since crumbled back to support and is consolidating the recent volatility. 

The markets will be looking for the next catalyst, but today's CPI, while important, was not it. 

''Talk of China’s growth pulse slowing coupled with frustration over still-elevated COVID infection rates (dampening vaccine optimism) also likely tempered market sentiment,'' analysts at ANZ Bank explained. 

''We remain of the view that the US rebound heading into H2 will underscore sentiment, and keep the NZD and commodities elevated, but it’s likely to be a bumpy ride,'' analysts at ANZ Bank have argued. 

Description of the Consumer Price Index

Consumer Price Index released by the Statistics New Zealand is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services.

The purchasing power of NZD is dragged down by inflation.

The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative.