NZD/USD: down 10 pips post CPI, moves back 10 pips once digested

• NZD/USD dropped circa 10 pips on the NZ Q2 CPI data that arrived at 0.4%.
• A deeper support comes as 0.6720 and resistance is located at 0.6860 (21-D SMA 0.6817). 0.6785 is where the 10-D SMA is located and bears are looking for closes below there to confirm a continuation of the downside and back into the bearish channel.

NZD/USD dropped circa 10 pips on the NZ Q2 CPI data that arrived at 0.4% and slightly lower than the 0.5% expected. The bird, however, was bid back up to the 5minute MAs, sending it back into its sideways drift between 0.6764 and 0.6779, (New York session's range). 

NZD/USD started out yesterday's session on the front foot from 0.6725 to late London highs today of 0.6792. However, US data and yields were on the up which underpinned demand for the greenback and knocked the bird off of its perch down to 0.6764 and ahead of today's CPI numbers.  The year on year data arrived as 1.5 % vs the
expected 1.6% y/y and prior 1.1%. Non-tradeable prices arrived as 0.4% q/q vs the tradeables 0.3% q/q. We now await the Reserve Bank of New Zealand 's own inflation measure today at 0300GMT. Either way, the RBNZ is not expected to raise rates until Autumn in 2019. We will also get the RBA minutes today.

More on RBA minuest and Aussie in general that here: 

AUD/USD: bulls hang in there while bears look for a test below 0.7400 ahead of RBA minutes

NZD/USD levels

Technicals remains the same on that data: A deeper support comes as 0.6720 and resistance is located at 0.6860 (21-D SMA 0.6817). 0.6785 is where the 10-D SMA is located and bears are looking for closes below there to confirm a continuation of the downside and back into the bearish channel. 0.6920, however, would put the bulls back in control and the June highs will be up for grabs. However, bulls really need to get above the 200-month moving average resistance at 0.7007 to stave off bearish pressures.