The US Dollar consolidates after the release of inflation data but remains under bearish pressure. US CPI came in at 2.7% YoY in July, slightly below expectations, while core CPI rose 3.1%, above consensus.
This combination reinforced market bets on a Fed rate cut in September, with odds climbing to 94%. The lower US rates typically weaken the USD, providing some support to the AUD.
The 4-hour chart for NZD/USD shows bullish price action above the 0.5870 level. The emergence of this bullish price action indicates that the pair is preparing to move toward 0.6140.
The negative price action in the US Dollar Index supports the bullish momentum in NZD/USD and signals further upside potential.
