Can NZD/USD Hold Above 0.60 After the Surge on Softer US CPI Data?

The New Zealand dollar has been declining since summer, but has been giving some bullish signals this month, indicating that NZD traders want to take the price above 0.60. Commodity currencies have been bearish against the US dollar, and this pair has been declining for more than three months, dipping below 0.58 in late October. The Chinese economic issues we witnessed earlier this year as the nation reopened after three years of coronavirus lockdowns were dragging on risk assets, but we’ve since seen some improvement in the sentiment as the Gaza war has not expanded further in the area, while the US economy is looking more stable and the FED less hawkish.

NZD/USD still remains bearish on the daily timeframe though, but the recent attempts to reverse the trend are showing that this pair might have reached a bottom after the two month decline. Although buyers are now facing the 100 daily SMA (green). This moving average has been acting as resistance before, rejecting the price twice in the last two months.

Yesterday the price climbed above 0.60, with US Treasury rates plummeting more than 20 bps below 4.45% yesterday, which pulled the USD lower, sending risk assets higher. In fact, yesterday was a great day for risk assets. The New Zealand dollar took full advantage of the weaker US inflation figures to end a six-day losing sequence ahead of today’s retail sales report from the US. It climbed above this month’s high of 0.6003 so the bullish momentum is looking good.

Today we had a round of economic data from China as well, including retail sales and industrial production. If the US retail sales report is weak, I think it will see a decent breakthrough to the upside, since it will further confirm that the FED won’t hike interest rates again.

NZD/USD Live Chart