Fundamental Overview
The US Dollar continues to consolidate despite the higher-than-expected inflation figures and a less dovish Powell last week. The market’s pricing remained largely unchanged at three rate cuts by the end of 2025.
This might be a signal that the market is now fine with the current pricing, and we will need stronger reasons to price out the remaining rate cuts. This could lead to some general US Dollar weakness in the short term.
On the NZD side, the market is pricing an 80% chance of a 50 bps cut at the upcoming meeting and a total of 142 bps of easing by the end of 2025. Inflation is back in the RBNZ’s target range, so the central bank can focus on growth now especially with the unemployment rate continuing to climb.
NZDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that NZDUSD bounced from the key support around the 0.5850 level and rallied into the major trendline where we got some rejection as the sellers stepped back in. The buyers will want to see the price breaking above the trendline to increase the bullish bets into the 0.6050 resistance, while the sellers will look for a break below the 0.5850 support to target the 0.5773 low.
NZDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price rejected the swing low level at 0.5912 near the major trendline as the sellers stepped in with a defined risk above the trendline to target the break below the 0.5850 support. There’s not much else we can add here as the buyers will need a break above the trendline to gain more conviction for further upside.
NZDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor support zone around the 0.5780 level. This is where we can expect the buyers to step in with a defined risk below the support to position for the break above the major trendline 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. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow, we get the latest US Jobless Claims figures, while on Friday we conclude the week with the US PMIs.
