Updated

Updated · Action Forex · Jul 22

NZD/USD Tests 0.5850 Resistance as NZ CPI Hits 4.1% and US Payrolls Miss at 57,000

Updated

Updated · Action Forex · Jul 22

NZD/USD Tests 0.5850 Resistance as NZ CPI Hits 4.1% and US Payrolls Miss at 57,000

Q: Will the Fed prioritize weak jobs data or the global energy shock in its upcoming rate decision?

The Fed is likely to give more weight to the global energy shock and its inflation fallout than to the latest weak payrolls print, unless labor data deteriorates much further. That bias is clear in the broader policy backdrop. June FOMC projections turned more hawkish, with officials lifting their 2026 rate outlook and raising core inflation forecasts. Fed officials have repeatedly stressed that inflation risks remain tilted upward, and the Middle East-driven energy shock has been identified as a key reason: higher oil and transport costs risk feeding into broader prices and inflation expectations. By contrast, the weak June payrolls report complicates the case for an immediate hike, but it has not yet clearly changed the Fed’s assessment of the labor market. Even with softer hiring, unemployment remains relatively contained and several policymakers still describe labor conditions as stable rather than recessionary. That means weak jobs data is more likely to delay tightening than to force a dovish pivot. So for the upcoming decision, the most probable outcome is a cautious hold paired with firm inflation language, rather than a rate cut or a clearly dovish shift. If energy-driven price pressures broaden into core inflation, the Fed is more likely to tighten later. If payroll weakness is followed by rising unemployment and softer wages, labor concerns would gain priority. For now, inflation linked to the energy shock appears to be the dominant concern.

1 articles · Updated · Action Forex · Jul 22

NZD/USD is locked around 0.5850, a level that has repeatedly switched between support and resistance and now marks the pair’s key near-term battleground.
New Zealand’s Q2 CPI accelerated to 4.1%, beating forecasts and the RBNZ’s 3.9% view, strengthening the case for more tightening after the bank’s surprise July rate hike to 2.50%.
US June payrolls rose just 57,000, with prior months revised lower, weakening the dollar’s rate support even as core inflation stays near 2.9% and markets price roughly even odds of a September Fed hike.
A break above 0.5850 could send the kiwi toward 0.6000, while rejection there would put 0.5781 and then the 0.5600 support zone back in focus.
Next week’s Fed decision and any fresh Middle East tensions are likely to determine whether the pair finally breaks out of its current range.

Sources

Action Forex1d ago

NZD/USD at 0.5850 Resistance Amid Conflicting NZ Inflation and Weak US Payrolls

With New Zealand hiking rates and US jobs faltering, whose economy will break first?

Is the kiwi's rally an illusion, with China's economic crisis looming over its top export market?

Will the Fed prioritize weak jobs data or the global energy shock in its upcoming rate decision?

Sources

1 total

Action Forex1d ago

NZD/USD at 0.5850 Resistance Amid Conflicting NZ Inflation and Weak US Payrolls

NZD/USD Tests 0.5850 Resistance as NZ CPI Hits 4.1% and US Payrolls Miss at 57,000

Summary

Sources

Insights

Related Stories

Sources

Related Stories