New Zealand CPI misses expectations and NZD/USD is pressured from daily resistance

New Zealand Consumer Price Index, released by the Statistics New Zealand, has missed expectations and is weighing on NZD/USD as follows:

• CPI (QoQ) Q1 1.8% (est 2.0%; prev 1.4%).
• CPI (YoY) Q1 6.9% (est 7.1%; prev 5.9%).

NZD/USD is falling from 0.6806 to a low of 0.6783 so far:

The price jetted from the daily resistance as per the 5-min chart reaction above and is now on the verge of taking on hourly support near 0.6770:

As for the daily chart:

The bears are engaged and should support break; then the outlook is bearish after that:

Sectoral Factor Model of Core Inflation

Now traders will be monitoring for more inflation data at 00300 GMT. The RBNZ’s preferred Sectoral Factor Model measure of core inflation. This measure of inflation separates the components of the CPI into tradables (products that are imported, or that compete with imports) and non-tradables (products that are not exposed to international factors). By distinguishing between these two sectors, the prices of which are widely regarded as being influenced by different things, the model allows an interpretation of what is driving core inflation. Central banks often use the concept of core inflation to examine true or underlying price inflation, abstracting from short-term volatility.

About Consumer Price Index

Consumer Price Index released by Statistics New Zealand is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of NZD is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A high reading is seen as positive (or bullish) for the NZD, while a low reading is seen as negative.