NZD/USD bulls come up for air, building a bullish case

• NZD/USD bulls burst to life in US session. 
• All eyes will be on the US CPI data for next clues. 

NZD/USD is on the backside of the prior bearish trend and is breaking higher from the double-bottom lows put in on the 15-minute chart in the US session on Tuesday. The pair have traveled from those lows of 0.6318 to a US session high of 0.6337 as the day draws to a close. 

´´Being long the Kiwi remains one of the market’s preferred ways to fade USD strength as the US rate hike cycle matures, markets press for cuts and the USD loses some of its erstwhile richness to fair value,´´ analysts at ANZ Bank argued.

´´Tonight’s US Consumer Price Index data will be key as markets eye an end to the hiking cycle; if that thesis is refuted, there will be volatility.´´

US CPI in focus

´´Core prices likely stayed firm in April, with the index rising a strong 0.4% MoM for a second straight month, as goods inflation likely continued to strengthen,´´ analysts at TD Securities said.

´´Shelter prices likely remained the key wildcard (we look for a rebound), while rising gas prices (+2.6% MoM) will likely lift non-core inflation. Our MoM forecasts imply 5.0%/5.5% YoY for total/core prices,´´ the analysts explained.