FxWirePro: NZD/USD rallies as NZ inflation hits 2-1/2-year high

• NZD/USD firmed  on Tuesday  after New Zealand's second-quarter inflation came in slightly above expectations, reinforcing the case for further interest rate hikes by the Reserve Bank of New Zealand.

•Annual inflation accelerated to 4.1% in the second quarter, topping economists' forecast of 4.0% and strengthening expectations that the RBNZ will continue tightening monetary policy.

•Statistics New Zealand said petrol was the biggest driver of inflation, with prices surging 27.5%, while diesel prices jumped 71.1%.

•Westpac expects the central bank to deliver additional 25-basis-point rate hikes at its September and December meetings, citing persistent inflation pressures.

•The Reserve Bank of New Zealand raised its cash rate to 2.50% earlier this month, marking its first increase in three years, and signalled that further policy tightening is likely as it seeks to return inflation to target while supporting the economy's ongoing recovery.

•  Immediate resistance is located at 0.5901(50%fib), any close above will push the pair towards 0.5924 (Higher BB).

•  Support is seen at 0.5993(61.8%fib)and break below could take the pair towards 0.5771(Jan 11th low).

 Recommendation: Good to buy around 0.5850 with stop loss of 0.5780 and target price of 0.5920