NZDUSD Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as
  expected at the last meeting 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 forecasts with the disinflationary progress continuing
  steady.
• The labour market continues to show weakness as Continuing Claims are now
  rising at a fast pace with the last NFP report
  missing across the board and yesterday’s Job Openings falling
  much more than expected.
• The ISM Manufacturing
  PMI
  last week missed expectations falling further into contraction, while the ISM Services PMI
  yesterday beat forecasts holding on in expansion.
• The hawkish Fed members recently shifted
  their stance to a more neutral position.
• The market expects the Fed to start cutting rates
  as soon as Q1 2024.

NZD

• The RBNZ kept its official cash rate
  unchanged at the
  last meeting while stating that demand growth continues to ease and it’s
  expected to decline further with monetary conditions remaining restrictive.
• The New Zealand 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 broke
decisively through the key resistance zone
around the 0.6070 level and extended the rally into the 0.62 handle. From a
risk to reward perspective, the buyers should wait for a pullback into the resistance now turned support where we
can find the confluence with the
38.2% Fibonacci retracement level
and the red 21 moving average. The
target for the buyers should be the next resistance around the 0.64 handle.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD for
quite some time. This is generally a sign of weakening momentum often followed
by pullbacks or reversals. In this case, it might be another confirmation for
the buyers to wait for a pullback into the 0.6070 support zone. The sellers, on
the other hand, will want to see the price falling back below the support zone
to confirm a reversal and position for a drop into the 0.59 handle.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the current price action with no clear level in sight where to lean on
to. This is where some patience is needed to let the market come into the
defined setup instead of chasing the price and risk some unnecessary losses due
to FOMO.

Upcoming Events

Today we have another US labour market report with
the release of the US ADP data. Tomorrow, it will be the time for the US
Jobless Claims figures, while on Friday we conclude the week with the NFP
report.