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 NFP report beat expectations across the board by a big margin.
  • The ISM Manufacturing PMI surprised to the upside with the new orders index, which is considered a leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat expectations across the board with the employment sub-index erasing the prior drop and prices paid jumping above 60.
  • 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 labour market report beat expectations across the board with lower unemployment rate and higher wage growth.
  • 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 once again on the key support zone around the 0.6050 level and pulled back into the trendline. This is where we can expect the sellers to step in again with a defined risk above the trendline to position for a breakout below the support and target the 0.59 handle next. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and start targeting new highs with the 0.6170 swing level as the first target.

NZDUSD Technical Analysis – 4 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 4 hour

On the 4 hour chart, we can see that the latest leg lower diverged with the MACD right at the key support. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we are still in the pullback territory as long as the price doesn’t break above the trendline. We can see that we have also the 61.8% Fibonacci retracement level around the trendline which adds some extra confluence to the bearish setup.

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 and the resistance zone around the trendline. What happens here will likely define where the pair will go in the next few weeks. A strong rejection should see the sellers taking the pair to new lows, while a break to the upside is likely to trigger a rally into new highs.

Upcoming Events

This week is basically empty on the data front with just the latest US Jobless Claims figures on Thursday being the only notable release.