16 Jul 2014
NZD/USD breaks lower on NZ CPI
FXStreet (Bali) - NZD/USD saw renewed selling pressure following a lower-than-expected NZ CPI, which came at 0.3% for June vs 0.4% exp.
The decline comes after an early 60+ pips sell-off as a reaction to Yellen's testimony, which despite not offering any hints for tighter policies to be priced in, the US Dollar managed to find support, mainly buoyed by the resilience of US bond yields.
Furthermore, part of the reason that saw the Kiwi come under pressure on Tuesday, were new falls in dairy prices. The GDT Index declined by 8.9% on Tuesday's fortnightly auction, led by a 10.9% fall in whole milk powder prices and 7.1% drop in skim milk prices.
Looking at the NZD/USD technicals, an area actin as a cluster of bids circa 0.8750 was broken on the CPI release, leading prices to extend losses until faced with 0.8720, new 5-day low, and key support converging with a double bottom from July 3rd, 4th. An acceleration lower may see 0.87 round number potentially tested ahead of 0.8685-0.8660, where a cluster of demand is expected.
The decline comes after an early 60+ pips sell-off as a reaction to Yellen's testimony, which despite not offering any hints for tighter policies to be priced in, the US Dollar managed to find support, mainly buoyed by the resilience of US bond yields.
Furthermore, part of the reason that saw the Kiwi come under pressure on Tuesday, were new falls in dairy prices. The GDT Index declined by 8.9% on Tuesday's fortnightly auction, led by a 10.9% fall in whole milk powder prices and 7.1% drop in skim milk prices.
Looking at the NZD/USD technicals, an area actin as a cluster of bids circa 0.8750 was broken on the CPI release, leading prices to extend losses until faced with 0.8720, new 5-day low, and key support converging with a double bottom from July 3rd, 4th. An acceleration lower may see 0.87 round number potentially tested ahead of 0.8685-0.8660, where a cluster of demand is expected.