FxWirePro: NZD/USD drifts lower as markets await US inflation data

• NZD/USD eased on Wednesday  as traders adopted a cautious stance ahead of the U.S. July inflation report, which is expected to provide fresh clues on the Federal Reserve’s interest-rate path.

• The U.S. July CPI report is due later Wednesday, with the Reuters poll looking for headline inflation of 3.4% year-on-year and core inflation of 2.5%. A softer-than-expected reading could reinforce expectations that the Federal Reserve will have room to ease policy.

• A softer-than-expected reading could reinforce expectations that the Federal Reserve will have room to ease policy.

• Attention will then turn to the Reserve Bank of New Zealand’s third-quarter Survey of Expectations on Thursday. The survey covers expectations for inflation, interest rates, exchange rates, GDP, wages and unemployment, making it an important indicator of how economists view the domestic policy outlook..
 
•  Immediate resistance is located at 0.5927(50%fib), any close above will push the pair towards 0.5952(Higher BB).

•  Support is seen at 0.5857(50%fib) and break below could take the pair towards 0.5847(SMA 20).

 Recommendation: Good to sell around 0.5870 with stop loss of 0.5950 and target price of 0.5800