Fundamental Overview
Yesterday, the US Consumer Confidence report surprised to the downside with one of the largest drops since 2021. The labour market data in the report softened a lot and it generally leads the unemployment rate.
The market responded by raising the probabilities for the Fed to cut by 50 bps in November to roughly 60%. The question now is whether this is just about the low hiring rate or something worse. We will have to wait for the NFP report next Friday.
On the NZD side, the market is pricing a 56% chance of a 50 bps cut at the upcoming meeting and 90 bps of easing by year-end.
NZDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that NZDUSD almost reached the 0.6370 high as the US Dollar continues to remain under pressure. If the price gets there, we can expect the sellers to step in with a defined risk above the level to position for a drop back into the 0.6217 level. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into new highs.
NZDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have an upward trendline defining the current bullish momentum. If we get a pullback, the buyers will likely lean on it to position for new highs, while the sellers will look for a break lower to increase the bearish bets into new lows.
NZDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have another minor trendline defining the bullish momentum of this timeframe. Again, the buyers will likely lean on the trendline to position for the continuation of the uptrend, while the sellers will look for a break lower to pile in for a drop into the major trendline. 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 PCE.
