FxWirePro: NZD/USD loses momentum but outlook is bullish

• NZD/USD edged lower on Wednesday but stayed close to a six-month high, supported by expectations of tighter monetary policy from the Reserve Bank of New Zealand.

•Data released last week showed Q4 consumer inflation rose more than expected and remained above the Reserve Bank’s target range, strengthening expectations that interest rates may need to rise later this year.

•   The RBNZ is expected to hold rates steady at its February meeting, while markets are pricing in a strong chance of a rate hike by September, with about a 50% probability of a move as early as July.

• Upcoming data will play an important role in shaping near-term direction for the pair. The December trade balance, due Thursday, will offer insight into export performance and global demand conditions.

•Strong trade numbers could reinforce the kiwi’s bullish momentum. In addition, critical Q4 employment data scheduled for next week will be closely watched, as labor market trends are a key input for Reserve Bank of New Zealand policy decisions

•  Immediate resistance is located at 0.6056(23.6%fib), any close above will push the pair towards 0.6071(Higher BB).

•Support is seen at 0.5943 (38.2%fib) and break below could take the pair towards 0.5896(Jan 23rd low).

 Recommendation: Good to buy around 0.6000 with stop loss of 0.5900 and target price of 0.6060