• EUR/NZD edged higher as investors remain cautious ahead of Wednesday’s U.S. inflation report, which is expected to provide fresh clues on the Federal Reserve’s interest-rate outlook..
• U.S. July CPI is the key event later Wednesday, with the Reuters poll forecasting headline inflation at 3.4% year-on-year and core inflation at 2.5% year-on-year.
• A hotter-than-expected reading could strengthen the U.S. dollar by reducing expectations for near-term Fed easing.
• Attention will also turn to the RBNZ’s Q3 expectations survey on Thursday, which will be closely scrutinized for signals about inflation expectations, economic growth and future monetary policy..
• The survey could influence expectations for the RBNZ’s September meeting and therefore become an important near-term catalyst for the Kiwi.
• Immediate resistance is located at 1.9662(38.2% fib), any close above will push the pair towards 1.9763 (Higher BB).
• Immediate support is seen at 1.9495(Lower BB) and break below could take the pair towards 1.9465 (23.5%fib).
Recommendation: Good to sell around 1.9670 with stop loss of 1.9750 and target price of 1.9600
