NZD/USD trims gains as CPI fell to the bottom of the RBNZ target in Q1
- NZ inflation falls to the bottom of the RBNZ target band.
- RBNZ to keep the interest rate on hold.
The NZD/USD has backed off from the session highs as investors digest the drop in the first quarter CPI to the bottom of the Reserve Bank of New Zealand's (RBNZ) target band.
The inflation as represented by the consumer price index (CPI) fell to 1.5 year low of 1.1 percent in the first quarter and neared the lower end of the RBNZ target range of 1 to 3 percent. The data indicates the RBNZ will likely leave the interest rate unchanged at the record low of 1.75 percent for some time.
Consequently, the NZD has come off highs. The New Zealand currency hit a session high of 0.7342 earlier today after official data showed the CPI bettered estimates on a month-on-month basis.
NZD/USD Technical Levels
Acceptance below the session low of 0.7309 would add credence to the bearish 5-day MA and 10-day MA crossover and strengthen the odds of a drop to 0.7241 (April 6 low). A violation there would expose support lined up at 0.7211 (100-day MA).
On the higher side, a close above 0.7342 (session high) could yield a re-test of the recent high of 0.7395 (April 13 high) and 0.74 (psychological hurdle).