FxWirePro: NZD/USD retreats slightly but trend is still bullish

• NZD/USD edged lower on Friday  as kiwi dollar eased   following the release of the New Zealand's annual inflation data as markets priced out any chance of further rate cuts and increased bets on hikes later in the year.

•  New Zealand’s annual inflation rose to 3.1% in the fourth quarter, above the central bank’s target band, reinforcing its move to signal an end to monetary easing and boosting expectations of rate hikes later this year..

•   Statistics New Zealand said the CPI rose 0.6% quarter-on-quarter in Q4, up from 0.5% in Q3, while annual inflation stood at 3.0% in the third quarter..

• The central bank cut the cash rate by 25 basis points at its last meeting in November to 2.25%, taking its total easing to 325 basis points since August 2024 in response to persistent weakness in the economy. But the RBNZ signalled in November an end to the easing cycle on signs that growth was picking up.

• Meanwhile,RBNZ Governor Anna Breman said there was still enough spare capacity in the economy to see inflation ease back toward 2%, and the central bank would act to ensure that happened..

•  Immediate resistance is located at 0.5946(Higher BB), any close above will push the pair towards 0.5982(23.6%fib).

•Support is seen at 0.5877 (38.2%fib) and break below could take the pair towards 0.5793(50%fib).

 Recommendation: Good to buy  around 0.5890 with stop loss of 0.5830 and target price of 0.5960