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 Q1 GDP surprisingly missed expectations although the core components showed a strong economy, nonetheless.
  • The US PCE came in line with expectations.
  • The US NFP beat expectations across the board although the average hourly earnings came in line with forecasts.
  • The US PMIs missed expectations in April with the commentary citing lower inflationary pressures but also increased layoffs.
  • The market 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 managed to erase most of the losses from the US CPI release and almost reached the key trendline resistance around the 0.60 handle where we had also the 61.8% Fibonacci retracement level for confluence. The price couldn’t push right into it as the pair rolled over before that. We may be heading back into the 0.5860 support but the sellers will need to break some key levels on the lower timeframes to keep pushing to the downside.

NZDUSD Technical Analysis – 4 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 4 hour

On the 4 hour chart, we can see that the price bounced from the key support zone around the 0.5920 level where the buyers stepped in with a defined risk below it to position for a rally back into the major trendline targeting a break above it. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 0.5860 support.

NZDUSD Technical Analysis – 1 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 1 hour

On the 1 hour chart, we can see that the price has been diverging with the MACD for some time as it was rallying into the major trendline. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it led to a pullback into the support zone but a break below it would confirm a reversal. This week is full of economic data which will likely give us a direction for the next few weeks.

Upcoming Events

Today, we have the US Q1 Employment Cost Index and the Consumer Confidence report. Tomorrow, we get the New Zealand Jobs data, and later in the day the US ADP, the ISM Manufacturing PMI, the Job Openings and the FOMC rate decision. On Thursday, we will see the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP and ISM Services PMI.