NZDUSD Technical Analysis | Forexlive

USD

• The Fed left interest rates unchanged as expected at the last meeting, with virtually no change in its statement. The Dot Plot showed three more rate cuts for 2024 and the economic projections were improved with higher growth and inflation and lower unemployment.
• Fed Chairman Powell maintained a neutral stance, saying it was premature to react to recent inflation data given possible obstacles on the path to their 2% target.
• The US CPI and PPI exceeded expectations for the second month in a row.
• U.S. NFP beat expectations across the board, although average hourly earnings were in line with forecasts.
• The US ISM Manufacturing PMI significantly beat expectations as the price component continued to rise, while the US ISM Services PMI missed expectations as the price index fell to a 4-year low .
• There is now a 50/50 chance of a rate cut in June.

CAD

• The RBNZ kept its policy rate unchanged, abandoning its tightening bias and stating that the OCR will need to remain at a restrictive level for an extended period.
• The latest New Zealand inflation data is in line with expectations and supports the RBNZ’s patient stance.
• The labor market report beat expectations across the board with a lower-than-expected unemployment rate and higher wage growth.
• The manufacturing PMI improved in February, remaining in contraction while the services PMI increased further, while maintaining its expansion.
• The market expects a first decline in August.

NZDUSD Technical Analysis – Daily Timeline

On the daily chart we can see that NZDUSD has rallied to retest the broken support-turned-resistance zone where we also have the confluence of the 38.2% Fibonacci retracement level and the red 21 moving average. This is where we can expect sellers to step in with a defined risk above the Fibonacci level to position themselves for a fall to new lows. Buyers, on the other hand, will want to see the price move higher to start targeting resistance at 0.6218.

NZDUSD Technical Analysis – 4 Hour Timeframe

On the 4-hour chart, we can see that we recently had a rejection of resistance and a pullback towards the 50% Fibonacci retracement level and the red 21 moving average. Price has rebounded from this area of support following a Goldilocks NFP report and moved back up to the resistance zone. If we get another rejection of resistance, we can expect buyers to rely on the trendline with defined risk below to position themselves for a breakout with a better risk/reward setup. Sellers, on the other hand, will want to see the price fall to increase bearish bets to new lows.

NZDUSD Technical Analysis – 1 Hour Timeframe

On the hourly chart we can see that we have another trendline that defines the recent uptrend following the NFP release. If price breaks above the trendline, we can expect sellers to rally with more conviction to position themselves for a decline into the next trendline. Buyers, on the other hand, will likely continue to rely on the trendline to print new highs and lows.

Events to come

Tomorrow we have the RBNZ rate decision, US CPI report and FOMC minutes. On Thursday we will have the US PPI and the latest US jobless claims figures. On Friday we wrap up the week with the New Zealand Manufacturing PMI and the University of Michigan Consumer Sentiment Survey.