NZD/USD Consolidates Below 0.5900, CPI Up Shortly

The Kiwi traded lower on Tuesday, although all the loses came during the Asian session before spending the remainder of the session in a 20-pip range. Focus will now turn to CPI out shortly with expectations of a pick-up from last quarter to 0.6% from 0.50%. The NZD finished the session down 0.37% at 0.5881, while the BBDXY closed up 0.36% at 1,266.18.

• The NZD/USD has fallen for three straight days, and is now off 3.33% in the past week with the move driven by rising US bond yields, with investors reassessing their Fed cut view and mixed Chinese data. The pair remains in a downtrend, trading well below the 20, 50, 100 & 200-day EMA, while the 14-day RSI indication nears oversold territory at 31.81. The currency closed the session just off new YtD lows of 0.5868 at 0.5881.
• Key levels to watch: Initial support is 0.5863 (Nov 11 lows), while a break here could signal a move to test the yearly lows at 0.5774 (Oct 26 lows). Initial resistant is at 0.5907 (Apr 16 highs), above here 0.5950 (Apr 15 highs).
• The US-NZ 2y is down 1bp to -17.5bps
• Earlier, Average price for whole milk powder rose 0.4% to $3,269 from $3,246, Fonterra's GDT Price Index rose 0.1%
• (RNZ) Reserve Bank considers the digital dollar: 'NZ's money must innovate to stay relevant - (See link)
• Option expiries: 0.5900 (NZD1b), 0.6025 (NZD429.1m), 0.5905 (NZD419.4m) Apr 17 NY cut
• Looking ahead: CPI at 8:45am AEST and Non Resident Bond Holdings at 1:00pm AEST