FxWirePro: NZD/USD extends range trade for the second straight session, outlook bearish

Chart - Courtesy Trading View 

NZD/USD was trading 0.09% lower on the day at 0.5996 at around 10:30 GMT.

The pair is extending range trade for the second straight session, outlook remains bearish.

Data released overnight showed US Producer Price Index (PPI) declined to 8.7% YoY in August from 9.8% in July, versus 8.8% in market forecasts. 

Details of the report showed Core PPI also eased to 7.3% YoY from 7.6% but surpassed the market expectation of 7.1%.

Favouring USD bulls are the 75% chance of the Fed’s 75 basis points (bps) rate hike in the next week, as well as the 25% odds favoring the full 100 bps lift, as per the CME’s FedWatch Tool. 

Also, the Sino-American tussles and the energy crisis in Europe which challenge the market optimism keep USD bid.

Focus now on the US Retail Sales for August, expected to remain unchanged at 0.0%. Major attention will be on the Fed meeting next week. 

Technical indicators for the pair are strongly bearish. Volatility is high and momentum is bearish.

Support levels - 0.5972 (Lower BB), 0.60

Resistance levels - 0.6043 (5-DMA), 0.6067 (200H MA)

Summary: NZD/USD poised for further downside, next bear stop likely at 0.5920 (May 2020 low).