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.

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.

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