USD

  • The Fed left interest rates unchanged as expected while dropping the tightening bias in the statement but adding a slight pushback against a March rate cut.
  • Fed Chair Powell stressed that they want to see more evidence of inflation falling back to target and that a rate cut in March is not their base case.
  • The latest US GDP beat expectations by a big margin.
  • The US PCE came mostly in line with expectations with the Core 3-month and 6-month annualised rates falling below the Fed’s 2% target.
  • The US Job Openings surprised to the upside although the hiring and quit rates remain below pre-pandemic levels. The US Jobless Claims, on the other hand, missed expectations for the second consecutive week although they remain near the cycle lows.
  • The ISM Manufacturing PMI surprised to the upside with the new orders index, which is considered a leading indicator, jumping back into expansion.
  • The US Retail Sales beat expectations across the board.
  • The US Consumer Confidence report came in line with expectations but the labour market details improved considerably.
  • The market now expects the first rate cut in May.

NZD

  • The RBNZ kept its official cash rate unchanged at the last meeting stating that demand growth continues to ease and it’s expected to decline further with monetary conditions remaining restrictive.
  • The New Zealand inflation data printed in line with expectations supporting the RBNZ’s patient stance.
  • The latest labour market report showed a notable increase in the unemployment rate and a slowdown in wage growth which is something that will keep the RBNZ on the sidelines.
  • The Manufacturing PMI fell further into contraction with the Services PMI following suit.
  • The market expects the RBNZ to start cutting rates in Q2.

NZDUSD Technical Analysis – Daily Timeframe

NZDUSD Technical Analysis
NZDUSD Daily

On the daily chart, we can see that NZDUSD bounced on the key support around the 0.6050 level and rallied into the 0.6150 level where it keep on getting rejected by the resistance formed by the confluence of the trendline, the 50% Fibonacci retracement level and the red 21 moving average. This is where the sellers continue to pile in to target a break below the key support and extend the drop. The buyers, on the other hand, will want to see the price breaking above the trendline to invalidate the bearish setup and position for a rally into the 0.64 resistance.

NZDUSD Technical Analysis – 4 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 4 hour

On the 4 hour chart, we can see that the pair continues to range between the 0.6050 support and the 0.6150 resistance. The price is now back at the resistance and that’s where we can expect the sellers to pile in back again with a defined risk above the resistance to target a break below the support. The buyers, on the other hand, will want to see the price breaking above the resistance to open the door for a rally into the 0.64 resistance.

NZDUSD Technical Analysis – 1 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 1 hour

On the 1 hour chart, we can see more closely the recent price action with the pair now trading right around the resistance zone. What happens here will likely define where the pair will go next so all eyes will be on the NFP report later.

Upcoming Events

Today we have the US NFP report which is expected at 180K with estimates ranging from a low of 120K to a high of 290K. A number out of the range will cause a strong market reaction.