NZD/USD Price Analysis: Trades sideways around 0.6240 as focus shifts to US Inflation

• NZD/USD consolidates around 0.6240 as investors await the US CPI data for December.
• US core CPI is seen softening to 3.8% from 4.0% in November.
• The Kiwi asset oscillates in a symmetrical triangle, indicating a sideways move ahead.

The NZD/USD pair struggles for a direction as investors await the United States Consumer Price Index (CPI) data for December, which is scheduled for Thursday. The Kiwi asset trades back-and-forth around 0.6240 amid hopes that the release of the US inflation data will provide fresh cues about the likely monetary policy action by the Federal Reserve (Fed) for January’s monetary policy meeting.

Sell-off in the S&P500 futures has extended, indicating further decline in the risk-appetite of the market participants. The US Dollar Index (DXY) consolidates near 102.50 as investors shift focus towards the inflation data for December.

As per the estimates, the US headline inflation grew by 0.2% against 0.1% increase in November. The core CPI that excludes volatile food and oil prices grew steadily by 0.3%. The annual underlying inflation decelerated to 3.8% against the former reading of 4.0%.

NZD/USD trades in a Symmetrical Triangle chart pattern on an hourly scale, which indicates a sharp contraction in volatility. Downward-sloping trend of the aforementioned chart pattern is plotted from January 4 high at 0.6286 while the advancing trendline is placed from January 8 low at 0.6212. The 20-period Exponential Moving Average (EMA) remains sticky to the Kiwi asset, indicating a consolidation ahead.

An upside move would appear if the asset breaks above January 5 high around 0.6280. This will drive asset towards January 2 high at 0.6335, followed by December 29 high at 0.6360.

In an alternate scenario, a breakdown below December 18 low near 0.6200 would expose the asset to 12 December 2023 high at 0.6170 and 8 December 2023 low near 0.6100.

NZD/USD hourly chart