Home Forex News NZD/USD drops as CPI drops 0.5% As AUD/USD Tumbles On Poor Unemployment...

NZD/USD drops as CPI drops 0.5% As AUD/USD Tumbles On Poor Unemployment Data

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  • NZD/USD eases as bearish pressure continues
  • New Zealand CPI drops 0.5% in June
  • The unemployment rate in Australia stands at 7.4%

The New Zealand dollar (NZD/USD) failed to maintain the gains posted on Wednesday as the souring sentiment in the market continues to weigh on pair keeping the bearish pressure intact.

Time                            : 07-16-2020

Pivot                           : $0.6561

Technical View           : Long above $0.6581

Targets                     : $0.6594 – $0.6605 – $0.6623

Comments                : Weak Bearish/Sideways

Last Price                 : $0.65

Technical View        : Short below $0.6541

Targets                   : $0.6525 – $0.6517 – $0.6496

New Zealand report first drop in inflation in five years

The kiwi continues to trade sideways after Stats NZ indicated that CPI in the June quarter dropped 0.5% as following a drop in hotel and motel prices as well as oil prices due to COVID-19 pandemic. This was the first drop in quarterly inflation since December 2015 when there was a 0.5% drop.

Also, the petrol price over the quarter dropped 12% which is the largest drop in oil prices since December 2008. On average the price of 91 octane petrol was around $1.83 per liter down from $2.09 per liter reported in the previous quarter.

AUD/USD tumbles on unemployment data

On the other hand, the Australian dollar also tumbled on the surge of Unemployment Rate to 7.4% in June as well as the rising number of new cases. The resurgence of COVID-19 cases has resulted in economic uncertainty and has forced businesses to be fluid as it threatens efforts to reopen.

Time                      : 07-16-2020

Pivot                     : $0.7004

Technical View     : Long above $0.6581

Targets                 : $0.7044 – $0.7064 – $0.7086

Comments           : Weak Bearish/Sideways

Last Price             : $0.70

Technical View    : Short below $0.6984

Targets                : $0.6964 – $0.6944 – $0.6911

The expected inflation rate reported in July dropped by 0.1% to 3.2% according to the Melbourne Institute Survey of Consumer Inflationary and Wage Expectations. The number of respondents expecting an increase in petrol prices also dropped to below 50% for the third month running. Equally total pay growth in June was negative at -0.1% and in July only 28.9% of respondents have reported growth in total pay.

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