Fundamental Overview
The bullish momentum in the US Dollar seems to be waning as GBPUSD couldn’t print a new low despite another set of strong US data. In fact, the US Retail Sales beat expectations across the board by a big margin and the US Jobless Claims came out much better than expected.
One caveat is that the market has now priced out the aggressive rate cuts expectations and it’s almost perfectly in line with the Fed’s projections. Therefore, we will likely need stronger US data and especially signs of a pickup in inflation to see the market pricing in an earlier pause in the Fed’s easing cycle.
The next big risk events will be in November when we get the October data, the FOMC policy decision and the US election.
On the NZD side, the New Zealand Q3 CPI this week missed expectations solidifying the market’s view for another 50 bps cut at the upcoming meeting and even pricing 12% chance of a 75 bps move.
NZDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that NZDUSD is consolidating around the key 0.6050 support zone. This is where we can expect the buyers to step in with a defined risk below the support to position for a rally into the 0.6217 resistance. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 0.5850 support next.
NZDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the rangebound price action as the bearish momentum waned. We have the 0.61 handle acting as resistance here so a break above it will likely see the buyers increase the bullish momentum into the 0.6217 resistance.
NZDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much more we can glean from this timeframe as the market participants will likely keep on playing the range until we get a breakout. The red lines define the average daily range for today.
