Forex: NZD/USD remains supported at 0.8450/60

FXstreet.com (Barcelona) - The NZD has been pressured today by the slightly softer than expected CPI in New Zealand, allowing the loss of the 0.8500 handle in the NZD/USD, promptly buoyed by support at 0.8450/60 during the Asian session. The cross remains at the lower band of its daily trading range, back to that support after failing a bouncing movement at 0.8480.

“Despite the slight miss on inflation, domestic activity remains robust overall and we continue to believe the RBNZ should be one of the first developed-world central banks to hike rates (penciled in for the end of this year). While that should lend overall support to the NZD, commodity prices could become a weight in the shorter term in the case of a continued slide”, wrote TD Securities analysts.

In case of the loss of support at 0.8450/60, the NZD/USD could fully retrace yesterday’s gains back to 0.8414 or even regress to this week’s lowest price at 0.8378 printed on Monday. On the upside, above the psychological level at 0.8500 and yesterday’s high of 0.8510, the cross still has a long way to go to erase this week’s losses back to 0.8569.