NZD/USD bounces into upper 0.6700s as traders eye upcoming NZ CPI release, Powell speech
20.04.2022, 13:27

NZD/USD bounces into upper 0.6700s as traders eye upcoming NZ CPI release, Powell speech

  • USD profit-taking and localised strength in the antipodean currencies has helped NZD/USD recovery into the upper 0.6700s on Wednesday.
  • Traders eye upcoming key risk events on Thursday, including Q1 NZ CPI and Fed Chair Powell’s speech.

Profit-taking on increasingly stretched USD long positioning, plus localised strength in the two antipodean currencies has seen NZD/USD post an impressive recovery on Wednesday. The pair was last trading higher by about 0.8% in the 0.6780s, up from earlier weekly lows in the 0.6720s and eyeing a test of its 50-Day Moving Average which currently resides just above 0.6810.

Key New Zealand Q1 2022 Consumer Price Inflation figures are scheduled for release at the start of Thursday’s Asia Pacific session and, if they come in as spicey as the just-released Canadian numbers, could ignite a further recovery in the pair. Short-term NZD/USD bulls will be eyeing a potential push back into the 0.6800s and a recovery back towards key resistance at 0.6900, where the 200DMA resides.

However, whilst the USD bears are in control on Wednesday, this goes against the recent trend towards a stronger buck as traders price in a more aggressive Fed tightening cycle, and could thus prove short-lived. Fed Chair Jerome Powell, if he comes across as sufficiently hawkish in his speech on Thursday, could reignite US dollar upside. NZD/USD traders should be prepared for the pair to fall back to test March/April lows in the low 0.6700s one again.  

 

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