NZDUSD Technical Analysis | Forexlive

NZDUSD Fundamental Analysis

US

• The Fed left interest rates unchanged as
  expected at the last meeting.
• The macroeconomic projections were revised higher,
  and the Dot Plot showed that the FOMC still expects another rate hike by the
  end of the year with less rate cuts projected in 2024.
• Fed Chair Powell
  reaffirmed their data dependency but added that they will proceed carefully.
• The US Core PCE last
  week came in line with expectations, so the market’s pricing barely changed.
• The labour market remains
  pretty resilient but we are starting to see some weakness as Continuing Claims missed
  expectations once again last week pointing to an upward trend.
• The US Retail Sales
  recently beat expectations by a big margin with positive revisions to the prior
  figures, suggesting the consumers’ spending remains solid.
• The recent US PMIs showed
  that the economy now looks more balanced.
• Fed Chair Powelland other FOMC members continue
  to highlight
  the rise in long term yields as doing the job for the Fed and therefore they
  are expected to keep rates steady this week.
• The market doesn’t expect the Fed to hike anymore.

New Zealand

• The RBNZ kept its official cash rate
  unchanged while
  stating that demand growth continues to ease and it’s expected to decline
  further with monetary conditions remaining restrictive.
• The recent New Zealand inflation data missed expectations
  supporting the RBNZ’s stance.
• The latest employment data surprised to the upside.
• The wage growth has also missed
  expectations and it’s something that the central banks are watching closely.
• The Manufacturing PMI continues to slide further into
  contraction, but the Services PMI jumped back into expansion.
• The RBNZ is expected to keep the
  cash rate steady at the next meeting.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the NZDUSD pair
continues to pull back into the key resistance around
the 0.5860 level. That’s where we can expect the sellers to step in with a
defined risk above the level to position for a drop into new lows. The buyers,
on the other hand, will want to see the price breaking higher to increase the
bullish bets and start targeting the trendline.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the last leg
lower was diverging with the
MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we are seeing a pullback into the key resistance zone
around the 0.5860 level where we can also find the 38.2% Fibonacci retracement level
for confluence. This
will be a key spot for market participants.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a short-term bullish trend on this timeframe as the price continues to
print higher highs and higher lows. The buyers recently leant on the trendline
to position for a rally into the resistance hoping for a breakout. More
conservative sellers may want to wait for the price first breaking below the
trendline to confirm a bearish continuation and position into new lows.

Upcoming Events

This week, we will get lots of tier one data points with
the US labour market and the FOMC decision in focus. Today, we have the US
Employment Cost Index, the Consumer Confidence report and the New Zealand
Labour Market data. Tomorrow, it will be the time for the US ADP, the ISM
Manufacturing PMI, the Job Openings data and the FOMC rate decision. On
Thursday we will have the US Jobless Claims data, while on Friday we conclude
the week with the US NFP report and the ISM Services PMI.