NZDUSD Losses Deepen Following US PPI Data

Fundamental Analysis

* Persistent Inflation: The New Zealand Dollar continues its downward trend, reaching a three-month low as the U.S. dollar gains strength, bolstered by recent U.S. inflation figures. October’s Producer Price Index (PPI), which gauges inflation at the producer level, met forecasts, showing a 0.2% monthly rise after a revised 0.1% increase in the prior month. Although core PPI edged up slightly year-over-year, the headline PPI aligned with expectations. Fed Chairman Jerome Powell noted that the strong U.S. economy allows the Federal Reserve to adopt a cautious stance on the timing and scale of potential interest rate cuts. As a result, traders have reduced the likelihood of a December rate cut, with CME FedWatch now indicating a 51.7% probability that rates will remain unchanged and a 48.3% chance of a 25-basis-point cut.

Technical Analysis

* Technical Breakout: NZDUSD was traded lower following prior breakout below the previous support level 0.58750. MACD which illustrate ongoing bearish momentum signal suggest the pair to likely further extend its losses.

* Resistance and Support: If the bearish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 0.57750. Conversely, a potential reversal is also to be expected and the price could head back towards 0.59755 after it breach back above the level 0.58750.

Potential Risks

Looking ahead, investors will turn their attention to upcoming key U.S. data Retail Sales, set to be released later, for additional guidance and insights into the economy’s momentum.

Learn more about how to navigate the prop trading landscape by checking out PU Xtrader’s trading blogs.

Monitoring

Stay updated on US and New Zealand data, central bank updates and any shifts in the US Dollar’s strength by following PU Xtrader’s financial news page.

Register For PU Xtrader Challenge And Start Prop Trading

Take Challenge