USD
- The Fed left interest rates unchanged as expected 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 recent US CPI missed expectations across the board bringing the expectations for rate cuts forward.
- The labour market is starting to show weakness as Continuing Claims are now rising at a fast pace and the recent NFP report missed across the board.
- The US Consumer Confidence and University of Michigan Consumer Sentiment continue to fall.
- The latest US ISM Manufacturing PMI missed expectations by a big margin, followed by a disappointing ISM Services PMI, although the latter remained in expansion.
- The recent US Retail Sales beat expectations, while the US PPI missed forecasts by a big margin.
- The recent Fedspeak has been leaning on the hawkish side, but last week’s inflation report pretty much confirmed that the Fed might be done for the cycle.
- The market doesn’t expect the Fed to hike anymore.
NZD
- The RBNZ kept its official cash rate unchanged while stating that demand growth continues to ease and it’s expected to decline further with monetary conditions remaining restrictive.
- The New Zealand recent 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 reached a key resistance zone around the 0.61 handle where we can also find the 50% Fibonacci retracement level of the entire fall from the 0.64 level. This is where we can expect the sellers to start piling in with a defined risk above the Fibonacci level to position for a drop into new lows.
NZDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is diverging with the MACD right into the key resistance. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it might be another confirmation for the sellers that we might see at least a pullback from the resistance. The buyers, on the other hand, are likely to lean on the swing low around the 0.5950 level where they will also find the 61.8% Fibonacci retracement level for confluence.
NZDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a clear bullish trend on this timeframe. More aggressive buyers might want to lean on the trendline where they will also find the red 21 moving average for confluence, and target a break above the key resistance. The sellers, on the other hand, will want to see the price breaking below the trendline to increase the bullish bets into the lows.
Upcoming Events
This week is pretty empty on the data front with the US on holiday for Thanksgiving Day in the final part of the week. Today, we have the FOMC Meeting Minutes but it's unlikely to be market moving given that it's three-weeks old data. Tomorrow, we have the US Jobless Claims report which is probably going to be the most important release of the week. On Thursday, we have the New Zealand Retail Sales while on Friday we conclude the week with the latest US PMIs.
