NZD/USD shrugs off uptick in NZ CPI, stays pressured below 0.7200

• NZD/USD pays a little heed to mildly positive inflation data.
• New Zealand Consumer Price Index recovers 1.5% YoY, 0.8% QoQ during Q1 2021.
• S&P 500 Futures print mild gains after Wall Street’s second day of losses.
• Virus woes back US dollar’s bounce off early March lows, trans-Tasman data will be the key.

NZD/USD wavers around 0.7170 amid the initial Asian session on Wednesday. In doing so, the kiwi bears catch a breather after pulling the quote back from the one-month top while also refrain from welcoming mildly upbeat New Zealand (NZ) Consumer Price Index (CPI) data.

As per the Q1 2021 CPI release, NZ inflation eased mildly over the YoY while flashing 1.5% figures, above 1.4% expected and prior. However, the QoQ readings recovered well above the previous quarter’s 0.5% print to 0.8% but remained dismal compared to the 0.7% market consensus.

Read: NZ CPI arrives in line with expectations, kiwi flat

The coronavirus (COVID-19) woes are likely behind the sober reaction to the key data. The catalyst dragged down the risk barometers the previous day while portraying the US dollar index (DXY) bounce off the lowest since early March, not to forget the second day of losses on Wall Street.

Additionally, New Zealand’s GDT Price Index, -0.1% versus +0.3% prior, also exerted downside pressure on the NZD/USD prices.

Against this backdrop, the S&P 500 Futures consolidate recent losses, up 0.10% by the press time, but the kiwi traders are waiting for Australia’s preliminary Retail Sales for March and Westpac Consumer Confidence data for fresh impulse.

Also important will be the COVID-19 updates and the US-China, as well as Russia-Ukraine, news suggesting escalation in the geopolitical fears.

Technical analysis

Failure to provide a daily closing beyond a downward sloping trend line from March 02, around 0.7195, needs to drop back below 0.7155–50 support confluence, comprising 50-day and 100-day SMA, to recall the NZD/USD bears.