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.
  • The US CPI beat expectations for the third consecutive month, while the US PPI came in line with forecasts.
  • 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.
  • The US Retail Sales beat expectations across the board by a big margin with positive revisions to the prior figures.
  • The market now expects the first rate cut in September.

NZD

  • The RBNZ kept its official cash rate unchanged as expected with no change as the central bank continues to state 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 is struggling to break below the key support zone around the 0.5870 level. This is where we can expect the buyers to pile in with a defined risk below the zone to position for a rally into the major trendline. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the low at 0.5780, although they will have a much better risk to reward setup around the trendline where they will also find the 61.8% Fibonacci retracement level for confluence.

NZDUSD Technical Analysis – 4 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 4 hour

On the 4 hour chart, we can see that we got a spike lower tonight following the news of Israeli retaliation against Iran but the market faded the move completely as Iran downplayed the airstrikes. We can also notice that we have a strong divergence with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it might be a signal for a bigger reversal, and it might even end up being a double bottom with the major trendline as the target. In fact, the buyers will likely increase the bullish bets into the major trendline if the price were to break above the neckline at 0.5933.

NZDUSD Technical Analysis – 1 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 1 hour

On the 1 hour chart, we can see more clearly the divergence with the MACD which has been going on since the 0.60 handle. We can also notice that we have a minor resistance zone around the 0.59 handle where we can also find the red 21 moving average for confluence. This is where the sellers are likely to step in with a defined risk above the level to position for a break below the key support zone. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.