NZDUSD Technical Analysis | Forexlive

US

• The Fed left interest rates unchanged as
  expected with basically no change to the statement.
• Fed Chair Powell stressed
  once again that they are proceeding carefully as the full effects of policy
  tightening have yet to be felt.
• The US Core PCE last
  week came in line with expectations.
• The labour market remains
  pretty resilient but we are starting to see some weakness as Jobless Claims missed
  expectations once again this week with Continuing Claims now rising at a fast
  pace.
• The US Consumer
  Confidence fell for the third consecutive month
  although the data beat expectations.
• The US ISM
  Manufacturing PMI this week missed expectations by a big
  margin.
• 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 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 the
  central banks are watching carefully.
• The Manufacturing PMI continues to slide further into
  contraction, but the Services PMI jumped back into expansion.
• The market doesn’t expect the RBNZ
  to hike anymore.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that after breaking
above the key resistance around
the 0.5860 level, the NZDUSD pair kept on rallying strongly and it now eyes the
trendline around
the 0.5950 level where we can also find the 61.8% Fibonacci retracement level
for confluence. That’s
where we can expect the sellers to step in more aggressively with a defined
risk above the trendline 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 0.61 handle.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a better risk to reward setup
around the broken resistance turned support where
they will also find the confluence with the 38.2% Fibonacci retracement level
and the red 21 moving average. The
sellers, on the other hand, will want to see the price breaking below the
support to invalidate the bullish setup and position for a drop into new lows.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the bullish setup around the 0.5870 level. The price is now breaking
the recent high and we can even expect more buyers coming into the market at
these levels, but the risk to reward is much worse, especially trading into the
NFP report.

Upcoming Events

Today, we conclude the week with the US NFP report
and the ISM Services PMI. If the data misses expectations we are likely to see
more downside for the USD in the short-term.