The New Zealand CPI (Consumer Price Index), which is released every quarter, measures the change in the price of goods and services charged to consumers. A reading which is higher than forecast is bullish for the New Zealand dollar.
Here are all the details, and 5 possible outcomes for NZD/USD.
Published on Wednesday at 22:45 GMT.
Indicator Background
CPI is considered the most important inflation indicator and is can have a major impact on the movement of NZD/USD.
CPI edged up to 0.4% in Q4 of 2016, above the forecast of 0.3%. The markets are expecting a strong gain of 0.8% in Q1 of 2017. Will the indicator meet or beat this rosy prediction?
Sentiments and levels
US consumer indicators were soft last week, which could hamper the Fed’s plans to raise rates in June. New Zealand data has been steady, as global demand has picked up. Thus, the overall sentiment is bullish on NZD/USD towards this release.
Technical levels, from top to bottom: 0.7160, 0.7135, 0.7050, 0.7000, 0.6960 and 0.6900
5 Scenarios
- Within expectations: 0.3% to 1.3%. In this scenario, NZD/USD could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
- Above expectations: 1.4% to 1.8%: A strong reading than forecast could push the pair above one resistance level.
- Well above expectations: Above 1.8%: An unexpectedly sharp rise in inflation could push NZD/USD upwards, possibly breaking two or more lines of resistance.
- Below expectations: -0.2% to +0.2%: A reading in negative territory could pull the pair downwards, with one support level at risk.
- Well below expectations: Below -0.2%: Such a scenario could send the kiwi lower, possibly breaking two or more support levels.
For more on NZD/USD, see the New Zealand dollar forecast.
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