USD

  • The Fed left interest rates unchanged as expected at the last meeting with basically no change to the statement. The Dot Plot still showed three rate cuts for 2024 and the economic projections were upgraded with growth and inflation higher and the unemployment rate lower.
  • Fed Chair Powell maintained a neutral stance as he said that it was premature to react to the recent inflation data given possible bumps on the way to their 2% target.
  • The US CPI and the US PPI beat expectations for the second consecutive month.
  • The US NFP beat expectations across the board although the average hourly earnings came in line with forecasts.
  • The US ISM Manufacturing PMI beat expectations by a big margin with the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to the lowest level in 4 years.
  • There’s now basically a 50/50 chance of a 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 February remaining in contraction while the Services PMI increased further holding on in expansion.
  • The market expects the first cut in August.

NZDUSD Technical Analysis – Daily Timeframe

NZDUSD Technical Analysis
NZDUSD Daily

On the daily chart, we can see that NZDUSD rallied all the way back to retest the broken support zone now turned resistance where we have also the confluence of the 38.2% Fibonacci retracement level and the red 21 moving average. This is where we can expect the sellers to step in with a defined risk above the Fibonacci level to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to start targeting the 0.6218 resistance.

NZDUSD Technical Analysis – 4 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 4 hour

On the 4 hour chart, we can see that we got a rejection of the resistance recently and a pullback into the 50% Fibonacci retracement level and the red 21 moving average. The price bounced from that support zone following a goldilocks NFP report and rallied all the way back into the resistance zone. If we get another rejection from the resistance, we can expect the buyers to lean on the trendline with a defined risk below it to position for a breakout with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.

NZDUSD Technical Analysis – 1 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 1 hour

On the 1 hour chart, we can see that we have another trendline which has been defining the recent uptrend following the NFP release. If the price breaks the trendline, we can expect the sellers to pile in with more conviction to position for a drop into the next trendline. The buyers, on the other hand, will likely continue to lean on the trendline to print new higher highs and higher lows.

Upcoming Events

Tomorrow we get the RBNZ Rate Decision, the US CPI report and the FOMC Minutes. On Thursday, we will have the US PPI and the latest US Jobless Claims figures. On Friday, we conclude the week with the New Zealand Manufacturing PMI and the University of Michigan Consumer Sentiment Survey.