• NZD/USD edged higher on Friday as softer-than-expected U.S. producer price data weighed on the dollar and reduced expectations for a Federal Reserve rate hike in September.
• U.S. July PPI rose 4.7% y/y, below the 4.9% forecast, while initial jobless claims increased to 209k versus 202k expected, easing concerns over inflation and labor-market strength.
• Meanwhile, tensions over the Strait of Hormuz remain elevated, with both the U.S. and Iran claiming control, suggesting the geopolitical standoff could persist.
• New Zealand’s manufacturing sector expanded at a slower pace in July, with the PMI falling sharply to 54.3 from 60.1, pointing to some loss of economic momentum.
• Despite the softer manufacturing data, markets currently price an 85.4% probability of a 25-basis-point RBNZ rate hike on September 2 .
• Attention now turns to U.S. July retail sales due Friday, with economists expecting a modest 0.1% month-on-month increase.
• Immediate resistance is located at 0.5879(50%fib), any close above will push the pair towards 0.5953(Higher BB).
• Support is seen at 0.5766(38.2%fib) and break below could take the pair towards 0.5745 (Lower BB).
Recommendation: Good to sell around 0.5860 with stop loss of 0.5800 and target price of 0.5900
