NZD/USD breaks below the 200-DMA, hover around 0.7080 amid high US inflation

The NZD/USD extends its daily losses to two consecutive days, slides 0.70%, trading at 0.7081 during the New York session at the time of writing. The market sentiment is downbeat, portrayed by falling US stock indices printing losses between 0.11% and 0.18%, as US inflation figures rose above 6%, the highest reading since 1990.

Since the Asian session, the New Zealand dollar lost traction against the greenback on the expectations that higher US inflation numbers could spur a faster reaction of the Federal Reserve. Money markets increased the odds of a 25 basis points Fed rate hike by June of 2022.

US inflation reading post the most significant jump In 30 years

In the US economic docket, the Consumer Price Index for October increased by 6.2%, on an annual basis, higher than the 5.4% number in September, above the 5.3% expectations by analysts. The Core CPI, which excludes food and energy items, rose by 4.6% for the same period, also above the 4.3% foreseen by the market. Prices in energy, shelter, food, and vehicles spurred the spike in the CPI. Also, inflation is broadening beyond areas associated with a reopening.

Meanwhile, the US bond yields rise, with the 10-year benchmark note advancing seven and a half basis points, up to 1.524%, while the US Dollar following the 10-year footsteps, rising 0.62%, currently at 94.59.

NZD/USD Price forecast: Technical outlook

The NZD/USD moved to the downside since the Asian Pacific session began, retreating from the daily top at 0.7130 towards 0.7100, breaking below the 200-day moving average (DMA), usually viewed as a bearish signal. However, a daily close below the 200-DMA could open the door for further losses. The first demand area would be the 50-DMA at 0.7063, followed by the 100-DMA at 0.7023.

On the other hand, if NZD/USD buyers reclaim the 0.7100 figure, it would open the door towards a renewed test of the 0.7130 resistance level, followed by the November 4 high at 0.7178.