USD
- The Fed left interest rates unchanged as expected at the last meeting and dropped the tightening bias in the statement.
- The US PCE came in line with expectations.
- The US Jobless Claims missed expectations although the data is still in the recent ranges.
- The latest US ISM Manufacturing PMI missed expectations by a big margin remaining in contraction with the US ISM Services PMI following suit but holding on in expansion.
- The US Consumer Confidence missed expectations across the board.
- The market expects the first rate cut in June.
NZD
- The RBNZ kept its official cash rate unchanged dropping the tightening bias and stating that the OCR will need to remain at restrictive level for a sustained period.
- The latest 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 than expected unemployment rate and higher wage growth.
- The Manufacturing PMI improved in January remaining in contraction while the Services PMI jumped back into expansion.
- The market expects the first cut in August.
NZDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that NZDUSD has sold off aggressively following the RBNZ rate decision last week where it kept rates unchanged and dropped the tightening bias. The price is now consolidating around the key support zone. This is where the buyers should step in with a defined risk below the support to position for a rally back into the 0.6219 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the next support at 0.5870.
NZDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see the consolidation between the key support zone and the 0.6112 resistance. We can also notice that we have a divergence with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, if the price were to break to the upside the reversal would be confirmed, and the buyers would pile in more aggressively to extend the rally into the highs. The sellers, on the other hand, will likely lean on the resistance to position for a break below the support with a great risk to reward setup.
NZDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the recent rangebound price action. There’s not much else to do here other than waiting for the key breakouts and go with the flow. Watch out for the data and the Fed Chair Powell today.
Upcoming Events
Today we have the US ADP, the US Job Openings and the Fed Chair Powell speaking. Tomorrow, we get the latest US Jobless Claims figures, while on Friday we conclude the week with the US NFP report.