The US data has been consistently surprising to the upside since the last FOMC meeting and given the Fed’s message of two or more rate hikes coming this year if the economy performed as expected, the market started to price in a more hawkish path for interest rates.
The RBNZ, on the other hand, went on pause at the last meeting and unless we see the data surprise to the upside, especially the inflation numbers, the central bank should remain on hold.
NZDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that the price has rebounded strongly from the 0.6050 level, and it now looks like the NZDUSD is targeting the trendline at the 0.63 handle. The moving averages are again about to crossover and we should see more upside more here, but a lot will depend on the next NFP and CPI data.
NZDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the break of the 0.61 support resulted in a fakeout and the price rallied back strongly above the resistance and it’s now breaking above the upper bound of the bullish flag pattern. The breakout should lead to even more conviction for the buyers and a rally into the 0.63 handle where we find the previous swing high resistance and the major trendline. The sellers are likely to step in there with a defined risk above the level and target the 0.5987 support.
NZDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is now diverging with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. We should see the first rejection from the 0.62 swing high resistance where the sellers are likely to pile in targeting a break below the trendline and new lows. The buyers instead should wait for the price to come into the trendline to position for more upside. Alternatively, the buyers may pile in as soon as the price breaks above the 0.62 handle with conviction.
Upcoming Events
It’s Independence Day today for the US, so liquidity will be thinner. In the following days we will have some important data releases like the US Jobless Claims and ISM Services PMI on Thursday and the main event of the week: the US NFP report on Friday.
