NZDUSD Crashes after NZ CPI16 July, 2015 by Aayush Jindal in Fundamental Analysis, Market Analysis, NZDUSD, Technical Analysis
- New Zealand Dollar crashed against the US Dollar, as an important economic release in New Zealand came below the forecast.
- New Zealand Consumer Price Index released by the Statistics New Zealand rose by 0.3% in the second quarter of 2015, compared with the forecast of 0.4%.
- New Zealand Business NZ PMI released by the Business NZ increased from the previous revised reading of 52 to 55.2 in May 2015.
New Zealand CPI
Earlier during the Asian session, New Zealand Consumer Price Index, which is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services was released by the Statistics New Zealand. The forecast was lined up for an increase of 0.4% in the second quarter of 2015, compared with the same quarter a year ago. However, the result was disappointing, as the New Zealand CPI rose by 0.3%.
When we look at the quarterly change, the New Zealand Consumer Price Index increased by 0.4%, which was also on the lower side, as the market was expecting a rise of 0.6%. One point to note is that the average price of a liter of 91 octane petrol was $1.95, compared with $1.79 in the previous quarter. Commenting on the report, the prices manager Chris Pike, stated that “The main impact came from higher petrol prices, which were up 8.8 percent in the June quarter. Without petrol, the CPI was flat for the quarter”.
Overall, the NZ CPI missed the forecast, and ignited a downside reaction in the New Zealand Dollar. The NZDUSD dived and moved more than 80 pips lower Intraday.
NZDUSD Technical Analysis
As mentioned the NZDUSD pair moved lower after the release. There was a support trend line formed on the hourly chart, which was pierced by sellers to set the pair for more declines in the near term. If the pair corrects higher from the current levels, then the 38.2% Fib retracement level of the last drop from the 0.6740 high to 0.6530 low can be seen as a hurdle.
On the downside, a break below the recent low of 0.6530 might set the pair for more losses towards 0.6500.