NZDUSD Technical Analysis | Forexlive

USD

NZD

• 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 New Zealand recent inflation data missed expectations supporting the
  RBNZ’s stance.
• The latest labour market report showed a notable increase in
  the unemployment rate and a slowdown in wage growth which is something that is
  likely to keep the RBNZ on the sidelines.
• The Manufacturing PMI fell further into contraction
  followed by the Services PMI which fell back into contraction.
• The market doesn’t expect the RBNZ
  to hike anymore.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that NZDUSD rejected
the resistance around
the 0.60 handle and erased almost all the gains seen after the FOMC and NFP
report. The pair is now at a key support level where the buyers are likely to
step in to position for a rally back into the resistance. The sellers, on the
other hand, will want to see the price breaking lower to increase the bearish
bets into the 0.5775 low.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the sellers would be better off waiting for a pullback
into the trendline where
they will also have the red 21 moving average for confluence. The
buyers, on the other hand, should start to pile in around this support with a
defined risk below it to target the trendline first and eventually a breakout.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is diverging with
the MACD right
at the key support zone. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. In this case, it might be another
confirmation of an impending pullback into the trendline. If the price breaks
above it, the reversal would be confirmed, and the bearish setup would be
invalidated.

Upcoming Events

This week we have some top tier economic releases. We
begin today with the US CPI report which might be one of the most important
events of the week. Tomorrow, we have the US Retail Sales and PPI data, while
on Thursday we conclude with the latest US Jobless Claims figures.