On the daily chart below for NZDUSD, we can see that the price couldn’t break above the key 0.6389 resistance again and sold off soon after as the USD appreciated due to better than expected data that might force the Fed to hike again in June.

In fact, all the recent Fedspeak kept the door open for another increase in interest rates next month, but that will be decided mainly by the next NFP and CPI reports. Yesterday’s US Retail Sales data beat expectations giving the greenback another boost. The sellers at the moment are in control, and the natural target should be the support at 0.6084.

NZDUSD technical analysis

On the 4 hour chart below, we can see that the price fell really fast after breaking out of the trendline. Looks like the buyers didn’t have much conviction and folded as soon as the momentum switched to the downside. The final push lower was caused by the University of Michigan consumer sentiment report where the data missed expectations across the board and the long-term inflation expectations surprised with a big jump. Fed Chair Powell once mentioned that they consider consumer inflation expectations in their decisions. Anyway, the market pulled back on Monday to the red long period moving average and the 38.2% Fibonacci retracement level before falling again.

On the 1 hour chart below, we can see that the sellers were leaning on the 38.2% Fibonacci retracement level. The price has now broken below the counter-trendline, which should signal the end of the pullback and the start of another leg lower. The key levels to watch here are the Fibonacci level and the swing low support at 0.6234. The buyers will need the price to break above the Fibonacci level to regain control and possibly target the 0.6389 resistance again. The sellers, on the other hand, will need the price to break below the 0.6234 to pile in more aggressively and extend the selloff towards the 0.6084 support.