New Zealand CPI beats but NZD/USD holds in bearish territory

• NZD/USD holds steady despite CPI beat.
• The markets have piled into the US dollar following hawkish Fed Powell. 

Consumer Price Index for New Zealand arrived and beat expectations. The consensus expected inflation to rise 1.3% QoQ and 5.7% YoY. However, the data beat 1.4% and 5.9% respectively.

NZD/USD stabilised ahead of the Federal Reserve meeting, but the Fed's chair, Jerome Powell delivered a hawkish commentary at the press conference that shook things up. In early Asia, the bird is ending the day down near 0.5% to 0.6650 after falling from a high of 0.6701 to a low of 0.6638.

Fed's Powell's key comments

• We are of a mind to raise rates at march meeting’.
• The current economy means we can move sooner, perhaps faster than we did last time.
• Next meeting will be coming to more of the details on the Balance Sheet.
• Other forces this year should also bring down inflation.
• Quite a bit of room’ to raise rates without dampening employment.
• No decision made on policy path, path to be led by incoming data.

''Near term, we expect the kiwi’s downtrend to resume and rallies are selling opportunities,'' analysts at ANZ Bank explained. 

NZD/USD daily chart

The M-formation is a reversion pattern and bulls can targe the neckline near 0.6750. However, a more shallow target comes near the 38.2% Fibonacci around 0.67 the figure.