NZD/USD takes a U-turn after RBNZ’s Orr said downbeat inflation already factored

The NZD/USD is trading near 0.6750 during early Tuesday. The Kiwi pair recovered from the day’s low of 0.6740 after the RBNZ Governor said that the possibilities to downbeat data have already been factored into the bank’s dovish bias. The quote was earlier aiming to revisit 200-day SMA amid an overall recovery in the US Dollar.

Sluggish performance of the US equity benchmarks and upbeat NY Empire State manufacturing index seemed to shift market attention back to the US Dollar during early Tuesday.

However, comments from the Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr triggered the NZD/USD’s U-turn. The central bank governor said that the Kiwi is currently around 'happy space' and monetary policy easing bias remains in place for now. Though, statements like “possibilities of first quarter inflation numbers being undershot have already being factored in the RBNZ’s dovish bias” grabbed more attention.

The US industrial production for March and fortnightly New Zealand GDT price index are few intermediate data-points that Kiwi traders might be interested in ahead of the key New Zealand consumer price index (CPI).

Industrial production from the US could rise +0.2% from +0.0% whereas New Zealand’s GDT prices may slip -0.5% from +0.8% earlier. Further, New Zealand CPI for the first quarter (Q1) of 2019 could soften to 1.7% from 1.9% on a YoY basis while increasing to 0.3% from 0.1% on a quarterly basis.

NZD/USD Technical Analysis

200-day simple moving average (SMA) level of 0.6730, 0.6710 and 0.6690 are likely nearby supports for Kiwi sellers to watch ahead of targeting 0.6650 that holds the gate for the pair’s south-run to 0.6585.

Alternatively, 0.6800 and 0.6805-10 area comprising 100-day and 50-day SMAs can keep limiting immediate upside of the pair, a break of which can recall 0.6870 and 0.6900 on the chart.