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NZD/USD is pulling back from this week’s lows!

How high can NZD/USD fly? We’re taking a look at the 1-hour chart.

Before moving on, ICYMI, yesterday’s watchlist looked at NZD/JPY’s downtrend amidst risk aversion in the markets. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Yellen points to hedge funds, unregulated cryptocurrency as sources of instability

Report: Soaring food, fuel ramp up social unrest risk for emerging markets

China’s producer price increases slow down from 8.3% to 8.0% from a year ago in April

China’s CPI accelerates from 1.5% to 2.01% in April

Oil turns higher on looming EU ban on Russian oil

Asian shares edge up from near two-year lows as U.S. inflation data looms

Coinbase CEO says new disclosure does not mean firm faces bankruptcy risk

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.S. CPI report at 12:30 pm GMT
U.S. crude oil inventories at 2:30 pm GMT
U.S. budget balance at 6:00 pm GMT
NZ visitor arrivals at 10:45 pm GMT
U.K.’s RICS house price balance at 11:01 pm GMT
AU MI inflation expectations at 1:00 am GMT (May 12)
NZ’s quarterly inflation expectations at 3:00 am GMT (May 12)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: NZD/USD

NZD/USD 1-hour Forex Chart

NZD/USD 1-hour Forex Chart

NZD/USD has been trading in a downtrend since the 100 SMA crossed below the 200 SMA in mid-April!

We’re taking a closer look at the pair today because it has bounced TWICE from the .6300 psychological handle this week alone.

Are the bulls ready for a short-term reversal or at least a steep pullback?

Risk sentiment has been the name of the game in the past few days as traders worried about China’s COVID restrictions weighing on its economic recovery.

Meanwhile, traders continue to price in the Fed’s hawkish timeline ahead of the U.S. CPI report.

Let’s see if today’s U.S. CPI release sends NZD/USD somewhere interesting. Word around is that Uncle Sam’s April prices would support “peak inflation” theories.

If the report points to the Fed ending its 50 basis-point rate hikes sooner than later, then traders could take risks and dump USD in favor of higher-yielding bets like NZD.

If today’s CPI numbers support the Fed’s hawkish stance, however, then traders could buy more USD and drag NZD/USD to new May lows.