NZD/USD refusing to let go of 0.73 handle as US inflation looms

Kiwi unresponsive to market data ahead of US inflation.
Market sentiment driving major pairs ahead of US CPI data.

Joshua Gibson FXStreet

The NZD/USD has edged higher in the Asia markets, trying to extend past the 0.7300 handle. The pair ended Monday flat after spiking to a high of 0.7323 to kick off the new week, but market sentiment quickly reversed the play, sending the Kiwi back down against the US Dollar. The Kiwi is exploring upwards cautiously in early Tuesday trading, but with ongoing trade war fears spurred on by Trump's steel and aluminum tariffs, and Asian markets largely focused on the land sale scandal rocking the Japanese government, markets can expect the bears to keep a short leash on things.

With US CPI figures coming down the pipe for Tuesday at 12:30 GMT, markets are coiling as they brace for inflation expectations to once again drive the markets one way or another. The headline year-on-year figure for CPI is slated to come out at 2.2%, a slight uptick from the previous 2.1%. Expectations for signs of improving inflation within the US economy are beginning to grow, and with last Friday's jobs report showing slack on the back of disappointing wage growth, bulls will be looking for a decent beat of the CPI to send the US Dollar higher to match equities and bond yields, which traded higher after NFP showed 313k new jobs were added to the US employment landscape.

With US inflation ruling the headlines and little data on the docket for New Zealand, the Kiwi can expect to be taken for a ride by market sentiment throughout Tuesday as swings in risk appetite lead the NZD by the nose, at least until late Tuesday which will see New Zealand GDP figures at 21:45 GMT.

NZD/USD Technicals

Despite declining from a February high of 0.7436 the Kiwi is showing surprising resilience amid renewed Dollar bidding, and Daily candles show the NZD/USD trading above support from the 8 EMA at 0.7280, but the H4 charts show that a correction from this area will see the pair challenging support from the 50.0 Fibo level at 0.7255, awhile resistance sits at February swing high points at 0.73.45 and 0.7385.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

EUR/USD accelerates losses, focus is on 1.1800

EUR/USD’s selling pressure is gathering pace now, opening the door to a potential test of the key 1.1800 region sooner rather than later. The pair’s pullback comes on the back of marked gains in the US Dollar following US data releases and the publication of the FOMC Minutes later in the day.

GBP/USD turns negative near 1.3540

GBP/USD reverses its initial upside momentum and is now adding to previous declines, revisiting at the same time the 1.3540 region on Wednesday. Cable’s downtick comes on the back of decent gains in the Greenback and easing UK inflation figures, which seem to have reinforced the case for a BoE rate cut in March.

Gold reclaims $5,000 and above

Gold is back on the front foot on Wednesday, shaking off part of the early week softness and challenging two-day highs just above the key $5,000 mark per troy ounce. The move comes ahead of the FOMC Minutes and is unfolding despite an intense rebound in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Sui extends sideways action ahead of Grayscale’s GSUI ETF launch

Sui is extending its downtrend for the second consecutive day, trading at 0.95 at the time of writing on Wednesday. The Layer-1 token is down over 16% in February and approximately 34% from the start of the year, aligning with the overall bearish sentiment across the crypto market.