The Kiwi bounces off 0.5840 and surges to 0.6000. (Pivot Orderbook analysis)

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• The Kiwi bounces off 0.5840 and surges to 0.6000.
• Softer-than-expected US inflation data have crushed the USD.
• Stock markets rally on hopes of Fed easing over the coming months.

The pair currently trades last at 0.6004.

The previous day high was 0.5971 while the previous day low was 0.5873. The daily 38.2% Fib levels comes at 0.591, expected to provide support. Similarly, the daily 61.8% fib level is at 0.5934, expected to provide support.

The New Zealand Dollar skyrocketed after the release of cooler-than-expected US inflation figures. The pair, which has been trading lower during the Asian and European sessions, bounced up at 0.5840 to hit session highs right above 0.6000.

US inflation remained unchanged, at 0.4% against market expectations of a 0.6% reading, while year-on-year consumer prices eased to a 7.7% rate, well beyond the consensus 8%, following an 8,2% reading in September.

The core CPI, the Federal Reserve’s preferred gauge to assess inflationary pressures, which excludes volatile food and energy prices, has eased to 0.3% in October, from 0.6% in September, while the market had anticipated a softer decline to 0.5%. Year on year, the core CPI has retreated to 6.3% from 6.6% in September.

These figures increase evidence that inflation might have peaked, which eases the pressure for the Federal Reserve to maintain its aggressive monetary tightening cycle and boost expectations of a softer rate hike in December.

The USD and US Treasury bonds have dropped sharply. The US Dollar Index, which had appreciated more than 16% in 2022 so far, boosted by the US Fed’s hawkish stance, has lost about 2.2% after the data. Likewise, the benchmark US 10-year Treasury yield lost 30 basis points to 3.83%.

On the other hand, US stock markets have surged after the data, with the Dow Jones 2.5% up, the S&P500 appreciating 4% and the Nasdaq Index 5.42% above the opening levels.

Technical Levels: Supports and Resistances

EURUSD currently trading at 0.6004 at the time of writing. Pair opened at 0.588 and is trading with a change of 2.11 % .

The pair is trading above its 20 Daily moving average @ 0.5769, above its 50 Daily moving average @ 0.5819 , below its 100 Daily moving average @ 0.6028 and below its 200 Daily moving average @ 0.6331

The previous day high was 0.5971 while the previous day low was 0.5873. The daily 38.2% Fib levels comes at 0.591, expected to provide support. Similarly, the daily 61.8% fib level is at 0.5934, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.5845, 0.581, 0.5747
• Pivot resistance is noted at 0.5943, 0.6006, 0.6042

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