NZD/USD Starts the Week Stuck Between 2 MAs With no Direction
Commodity dollars were generally bullish in the last two months of 2023, with the USD turning bearish on softer Fed remarks and market expectations of multiple rate cuts this year, which the FED acknowledged in the December meeting, sending the USD further to the downside. The NZD took advantage of the bullish risk sentiment and climbed above 0.6350 by the end of December, however it has been trading in a range between two MAs since the start of 2024.
Buyers were in control the whole time, with little resistance on the way, even at the major 0.60 level. Moving averages were serving as support on the H4 chart when the price was on the bullish trend, with the 20 SMA (gray) which shows that the bullish momentum in this pair was quite strong.
New Zealand GDP Missed in December
However, the economic data from New Zealand is not so supportive of such bullish momentum. The GDP figures from New Zealand in December leaned on the soft side again, while the inflation report from the US last week came above expectations, which helped the US Dollar, with NZD/USD continuing to trade between the 200 SMA (purple) at the bottom and the 100 SMA (green) at the top.
US CPI Consumer Price Index Jumped Higher Last Week
The US consumer inflation CPI jumped to 3.4% YoY in December, beating the market forecast of 3.2% as well. The monthly inflation growth rate for last month also ticked higher to 0.3%, beating the market expectation of 0.2%. The annual Core CPI fell to 3.9% from the previous reading of 4.0%, but it came above expectations of 3.8% while the monthly figure stayed stable at 0.3%.
NZD/USD dipped below the 200 SMA (purple) on the H4 chart as the USD found some bids after the report, but it moved back up right away and retested the top of the range at the 1100 SMA the next day. But buyers couldn’t break that moving average and the price reversed back down. So, it seems like the range-bound price action will continue and we will continue to trade it, buying at the bottom and selling at the top until the PCE inflation report gets released later in the week.
NZD/USD Live Chart
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