- NZD/USD cleared part of it previous day’s losses and climbed to 0.6130, 0.90% up on the day.
- Core PCE came in at 4.6% YoY vs. the 4.7% expected in May.
- US bond yields retreated, weakening the US Dollar.
On Friday, following the release of soft Personal Consumption Expenditures (PCE) data from the US, the NZD/USD pair staged a recovery, erasing a portion of its previous day's losses. The pair advanced to 0.6120, marking an increase of 0.80% for the day. Following the data, US bond yields retreated, weakening the US Dollar, but remained in positive territory.
US reported soft PCE figures.
On Friday, the US Bureau of Economic Analysis reported that the Core PCE, the Federal Reserve’s (Fed) preferred gauge of inflation in the US, slightly decelerated in May. The figure declined to 4.6% YoY from its previous 4.7% reading, failing to meet the expectations of 4.7% and tallying a 0.3% MoM increase vs the 0.4% expected.
In response US bond yields retreated from daily highs as investors seemed to be betting on a less aggressive Fed. In that sense, the 2-year Bond yield peaked at 4.93%, its highest level since March 9, retreating to 4.85%, while the 5 and 10-year rates fell to 4.13% and 3.83%.
However, more evidence of inflation deceleration must be seen for the Fed to pivot from its hawkish stance. As for now, according to the CME FedWatch tool market is 86% sure of a 25 basis points (bps) hike on July 26 and still trying to figure out when the second hike Jerome Powell hinted will come.
NZD/USD Levels to watch
According to the daily chart, the technical outlook for the NZD/USD got better as the Relative Strength (RSI) and Moving Average Convergence Divergence (MACD) gained traction in negative territory. In addition, traders should eye the convergence of the 200 and 20-day Simple Moving Averages (SMA). Moreover, traders should eye the 200, 100 and 20-day Simple Moving Averages (SMA) convergence towards the 0.6140-0.6200 area as they seem to be about to perform a bearish cross.
On the downside, support levels to watch align at 0.6100, 0.6050 and at 0.6030 (strong support seen at the beginning of June).
NZD/USD Daily chart
.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD struggles near multi-month low below 0.6500 after Aussie jobs report
AUD/USD hangs near its lowest level since August 6 below the 0.6500 level following the release of rather unimpressive Australian employment details for October. Meanwhile, RBA Governor Michele Bullock said earlier on that interest rates were restrictive enough and will not rise any further.
USD/JPY briefly pops 156.00 on firmer US Dollar
USD/JPY holds firm near its highest level since July 24, having briefly popped 156.00 in the Asian session on Thursday. The continuation of the Trump trade lifts the US Dollar to yearly highs while Japan's stimulus plans fail to inspire the Yen. Traders watch out for any Japanese internvetion risks.
Gold downside appears unabated, with eyes on Fed Chair Powell
Gold price is sitting at its lowest level in two months near $2,560 early Thursday, as buyers eagerly await US Federal Reserve Jerome Powell’s speech for a brief respite.
XRP's open interest drops over 10% amid struggles near $0.7440 resistance
Ripple's XRP is trading near $0.6900, down nearly 3% on Wednesday, as declining open interest could extend its price correction. However, other on-chain metrics point to a long-term bullish setup.
Trump vs CPI
US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.