FX.co ★ NZD/USD

The NZD/USD strengthened to 0.5855 during the early Asian trading session on Wednesday. The New Zealand Dollar (NZD) appreciates slightly against the US Dollar (USD) on Chinese economic data. Traders should watch for US inflation data soon. According to China's National Bureau of Statistics on Wednesday, the country's Consumer Price Index (CPI) rose 0.8% YoY in August, up from 0.5% previously. The figure aligned with market expectations. Monthly CPI inflation rose 0.4% in August after falling 0.1% in July, above the consensus estimate of 0.3%. Additionally, the Chinese Producer Price Index (PPI) rose 3.8% YoY in August, up from 3.5% in July. Both sets of figures outperformed the consensus estimate of 3.7%. Positive Chinese CPI and PPI data may offer a boost to the Kiwi, as China is one of New Zealand's trading partners. Market participants will have to wait for US inflation data for more clues about US monetary policy. US PPI figures will be released on Thursday, while US CPI will be published on Friday. "The market is still digesting the positive surprise in the US payrolls data and waiting for forthcoming CPI and PPI reports, as rising crude oil prices raise the worries about inflation and fuel expectations of a September rate hike," said Peter Grant, vice president and senior metals strategist at Zaner Metals. Based on the CME FedWatch Tool, markets price in about a 59.4% chance of an interest rate increase at the Federal Reserve's upcoming policy meeting currently. Analysts at Commerzbank note that the RBNZ "raised the Overnight Cash Rate (OCR) by 25bp to 2.75% as expected," framing the move as part of a "gradual removal of monetary stimulus" that the bank deems appropriate "to return inflation sustainably to the target." In the daily timeframe, NZD/USD is consolidating just above the 100-day simple moving average (SMA), offering close trend support. At the same time, the lower Bollinger Band provides downside support and helps draw a wider range. However, price remains below the 20-period Bollinger Band SMA, meaning it is currently capped by the upper half of the band and suggesting a sideways near-term outlook for the currency pair. The RSI stands at 45.6, slightly below 50, indicating that upside momentum has been exhausted. However, bearish pressure is expected at the 100-day SMA at 0.5845 before meeting resistance at the lower Bollinger Band at 0.5825, where a breakdown will confirm the start of a deeper correction within the ongoing rebound from past lows. For upside, immediate resistance is the Bollinger 20-period SMA at 0.5905; a daily close above that price is needed to pave the way toward the upper band at 0.5990.