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 CPI yesterday came in line with expectations
  with the disinflationary progress continuing steady.
• The labour market has been showing signs of
  weakening lately but last week we got some strong releases with the US Jobless Claims and the NFP coming
  in strongly.
• The latest ISM Manufacturing PMI missed expectations falling further into
  contraction, while the ISM Services PMI beat forecasts holding on in expansion.
• The University of Michigan Consumer Sentiment survey came in much better than expected
  with inflation expectations tumbling.
• The hawkish Fed members recently shifted
  their stance to a more neutral position.
• The market expects the Fed to start cutting rates
  in Q2 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 expects the RBNZ to start
  cutting rates in Q3 2024.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that NZDUSD is now
at a key support zone
around the 0.61 handle where we can find the confluence with the
38.2% Fibonacci retracement level
and the red 21 moving average. This is
where we can expect the buyers to step in with a defined risk below the support
to position for a rally into the next resistance around the 0.64 handle. The
sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and position for a drop into the 0.5850 level.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price has
been diverging with the
MACD since
the last US CPI report in November. This is generally a sign of weakening
momentum often followed by pullbacks or reversals. The price has now pulled
back into the key support and that’s where we should see more buyers piling in.
If the price breaks below the support though, the reversal would be confirmed
and there will be high chances of seeing a selloff all the way down to the
0.5850 level. We can also notice that the price is trading inside a falling
channel, so a break above it should confirm a bullish flag and lead
to much higher prices.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the price action inside the channel with the price approaching the
lower bound of the channel. The buyers should start to pile in around these
levels and increase the bullish bets if the price breaks above the downward
counter-trendline as it would give a confirmation of a pickup in the bullish
momentum. The sellers, on the other hand, have 3 options:

• Wait for the price to break below the key
  support.
• Lean on the counter-trendline to position
  for a break below the support.
• Lean on the upper bound of the channel.

Upcoming Events

Today, we have the US PPI data followed by the FOMC
rate decision where the Fed is expected to keep interest rates unchanged. Tomorrow,
we will see the latest US Retail Sales and Jobless Claims figures, while on
Friday we conclude the week with the US PMIs.