NZD/USD bouncing off the 0.5580 lows ahead of CPI

[VelocityFX]

Yo guys, anyone else watching the Kiwi recovery this morning? We just tagged that 0.5580 level which was looking pretty grim, but the bounce back toward 0.5610 has definitely caught my eye. It seems like the slightly weaker USD and oil prices cooling off are finally giving us some breathing room, but I’m struggling to see if this is a genuine shift in order flow or just a classic dead cat bounce before the US CPI volatility hits. Ngl, catching a falling knife on NZD/USD has been a nightmare lately, so I’m really scanning the charts to see if we can actually establish a higher low here or if this is just a liquidity grab.

I'm curious where you mates are seeing the next major resistance levels on the 4H or Daily. If the CPI numbers come out soft and cool the DXY further, do we have enough momentum to push through the recent supply zones near 0.5650, or are we just going to get rejected and head back to those multi-year lows? I’m hesitant to scalp this with any real size without seeing more conviction in the volume, especially with the macro backdrop still feeling so heavy for the commodity currencies. The price action feels a bit thin right now and I'm worried about getting trapped if the trend remains bearish.

Are you guys planning to trade the breakout if we hold 0.5610, or are you waiting for the CPI print to confirm a reversal?

 

[Noah Vance BR]

Man, trying to long into a CPI print right at support sounds like a great way to donate to the market makers. The R:R might look okay on paper if you put a tight stop just under those lows, but with inflation data coming up, spreads are gonna blow wider than my ex's definition of "needing space." I'm sitting on my hands until the dust settles and we get an actual directional break.