• NZD/USD posts modest losses near 0.5950 in Thursday’s early Asian session. 
• The US July PCE rose 0.2% on the month and 3.7% on the year. 
• Jackson Hole symposium event will be in the spotlight on Friday.  

The NZD/USD pair trades with mild losses around 0.5950 during the early Asian session on Thursday. The US Dollar (USD) strengthens against the New Zealand Dollar (NZD) as US inflation data lifted expectations of a Federal Reserve (Fed) rate hike. All eyes will be on the Jackson Hole Symposium event later on Friday. 

The Personal Consumption Expenditures (PCE) Price Index rose 3.7% in the 12 months through July, unchanged from June and slightly above the 3.6% estimate, according to the US Commerce Department on Wednesday. On a monthly basis, the PCE increased 0.2% after falling 0.1% in June, above the consensus of a 0.1% growth. 

Meanwhile, the core PCE inflation, the Fed’s preferred inflation gauge, held steady at 3.3% YoY in July, in line with expectations.  

This report kept the market’s expectation for a Fed rate hike by year-end alive, though Chairman Kevin Warsh’s upcoming speech at Jackson Hole “will be the ultimate test,” Westpac economist Ryan Wells said. 

Markets are now pricing in nearly a 38% chance of a 25 basis points (bps) Federal Reserve (Fed) rate hike in September, compared with 36% before the data, according to the CME FedWatch tool.

Traders await the speech from Fed Chairman Kevin Warsh at the Jackson Hole symposium on Friday. This event could offer some clues about ‌the outlook for US interest rates.

RBNZ hike to 2.75% seen as virtually fully priced ahead of September decision

Brown Brothers Harriman notes that attention is now firmly on the next Reserve Bank of New Zealand policy meeting, with Elias Haddad highlighting that “the next RBNZ policy decision, which also includes a fresh Monetary Policy Statement, is on September 2 and a 25bps back-to-back hike to 2.75% is virtually fully priced-in.” This underscores market conviction that the central bank will continue its tightening cycle, even as recent data have pointed to some softness in headline retail activity.

Technical Analysis: Positive outlook of NZD/USD prevails above the 100-day SMA

In the daily chart, NZD/USD keeps a constructive bullish tone as spot holds above the 100-day simple moving average (SMA) and the Bollinger Bands’ middle line. Price is approaching the upper Bollinger Band, suggesting the latest advance is stretching toward the upper volatility envelope, while the Relative Strength Index (14) around 61.7 stays in positive territory without yet signaling overbought conditions.

On the topside, immediate resistance is located at the upper Bollinger Band at 0.5985, where buyers could start to encounter profit-taking. On the downside, initial support emerges at the Bollinger middle band at 0.5905, ahead of a deeper cushion at the 100-day SMA near 0.5845, with the lower Bollinger Band around 0.5830 reinforcing the broader demand zone on pullbacks.