NZDUSD Extend Losses Following US PPI

Fundamental Analysis

* Persistent Inflation: The New Zealand Dollar continues to slide, hitting a three-month low as the U.S. dollar strengthens, driven by recent U.S. inflation data. The Producer Price Index (PPI), reflecting inflation at the producer level, aligned with forecasts for October, showing a 0.2% monthly increase, following the previous month’s revised 0.1% rise. Although core PPI rose slightly on an annualized basis, overall headline PPI matched expectations. Fed Chairman Jerome Powell suggested that robust U.S. economic conditions allow the Federal Reserve to take a measured approach in deciding the timing and extent of any interest rate cuts. Consequently, traders have scaled back expectations of a December rate cut, with CME FedWatch now showing a 51.7% probability that rates will hold steady and a 48.3% chance of a 25-basis-point reduction.

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.

Understand how technical analysis can help you in this trading opportunity.

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.

Know how to manage trading risks with risk management strategies.

Monitoring

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

Grab the trading opportunity and dive into the action risk-free with a free demo account. It is the perfect way to hone your skills and explore the exciting world of trading!

Open Your Free Demo Account And Start Trading Risk-Free

Join Now

Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.