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NZD/USD Set to Rise: Leveraging Soft CPI and Fed Rate Cut Impact

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Hello Traders,

In today's trading session, we are closely monitoring NZD/USD for a potential buying opportunity around the 0.61500 zone. Currently, NZD/USD is trading in an uptrend and is undergoing a correction phase. This correction is bringing the pair closer to the key support and resistance area at 0.61500, a level that has historically acted as a significant pivot point.

From a fundamental perspective, yesterday's CPI data came in softer than expected. This indicates that inflationary pressures are not as strong as anticipated, suggesting a more subdued economic environment. Lower inflation reduces the urgency for aggressive monetary tightening, leading to market expectations of a more cautious approach from the Federal Reserve.

In response to the softer CPI data, the Federal Reserve did cut interest rates in its latest FOMC meeting. This dovish move is expected to weigh heavily on the USD, as lower interest rates generally lead to a weaker currency. This scenario supports our bullish outlook on NZD/USD, as a weaker USD increases the attractiveness of the NZD. Given these fundamental developments, the 0.61500 zone presents a strategic entry point for long positions in NZD/USD.

Trade safely,
Joe

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