New Zealand Consumer Price Index has been released as follows:
- New Zealand inflation for Q4 2020: CPI 0.5% QoQ vs expected 0%, prior 0.7%).
- YoY 1.4% vs 1% expected and 1.4% prior.
NZD/USD was testing below 0.7200 in the run-up to the data but has spiked to 0.72199 on the release.
NZD/USD technical analysis
NZD/USD had completed a 38.2% Fibonacci retracement on the 4-hour time frame and can be projected to extend to 0.7235:
Meanwhile, the market is bearish below 0.7170.
Description of the Consumer Price Index
Consumer Price Index released by the 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 purchasing 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.
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