Search ForexCrunch

New Zealand Inflation Expectations, which is released every quarter, gauges consumer expectations of which direction inflation is headed.  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 Tuesday at 2:00 GMT.

Indicator Background

Inflation Expectations is useful for predicting actual inflation numbers, as expectations of inflation often manifests into actual inflation.

The indicator has been steady, with two straight readings of 1.7%. Will the indicator climb in the Q1 report?

Sentiments and levels

The New Zealand economy is performing well and the New Zealand dollar has responded with strong gains in 2017. In the US, uneasiness over Trump and weak wage growth has dampened sentiment regarding a rate hike in the first quarter.  Thus, the overall sentiment is bullish on NZD/USD towards this release.

Technical levels, from top to bottom: 0.7485, 0.7400, 0.7310, 0.7265 and 0.7230.

5 Scenarios

  1. Within expectations: 1.4% to 2.0%. In this scenario, NZD/USD could show some slight fluctuation, but it is likely to remain within range,  without breaking any levels.
  2. Above expectations: 2.1% to 2.5%: A  strong reading than forecast  could  push the pair  above one  resistance level.
  3. Well above expectations: Above 2.5%: An unexpectedly sharp rise in inflation could push NZD/USD upwards, possibly breaking two or more lines of resistance.
  4. Below expectations: 0.9% to 1.3%: A  reading in negative territory  could pull the pair downwards, with one support level at risk.
  5. Well below expectations: Below 0.9%: 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.