Fundamental Overview
The USD continues to be backed by good economic data as we have also seen recently from the US PMIs last Friday and the US Consumer Confidence report this week. Although such data keeps the interest rates expectations stable around two cuts by the end of the year, it should also support the risk sentiment amid a pickup in growth. This could be a headwind for the greenback.
The NZD, on the other hand, has been under pressure due to some US Dollar strength this week. It looks like the price action is being influenced more by month-end, quarter-end and half year-end flows rather than something fundamental. We had also a key breakout in USDJPY yesterday and flows there might have spilled over to other major pairs.
NZDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that NZDUSD is bouncing on the key support around the 0.6082 level where we have also the 38.2% Fibonacci retracement level for confluence. The price yesterday probed below the level but eventually rallied back above it.
This is where the buyers will likely pile in with a defined risk below the support to position for a rally back into the 0.6217 resistance. The sellers, on the other hand, will want to see the price breaking lower again to gain more conviction and increase the bearish bets into the 0.60 handle next.
NZDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price action has been mostly rangebound between the 0.6082 support and the 0.6217 resistance. The buyers will want to see the price breaking above the downward trendline to gain more conviction and increase the bullish bets into the 0.6217 resistance next.
The sellers, on the other hand, will likely lean on the trendline with a defined risk above it and position for a break below the support with a better risk to reward setup.
NZDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a strong resistance zone around the 0.6145 level where the price got rejected from several times. This is what the buyers will ultimately need to break to extend the rally towards the 0.6217 resistance. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the US PCE report.