Fundamental Overview
The US CPI yesterday came in line with expectations leading to a bit of a “sell the fact” reaction in the US Dollar.
The bullish momentum picked up a bit later though as Fed’s Logan delivered a hawkish comment saying that “models show that Fed funds could be very close to neutral” basically implying a lot more cautious approach on rate cuts in 2025.
The market is viewing all of this in light of the recent US election as Trump’s policies are likely to spur growth and potentially keep inflation above target for longer, making the Fed’s job of bringing inflation back to target a bit harder.
NZDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that NZDUSD is testing a key support zone around the 0.5850 level. This is where the buyers will likely step in with a defined risk below the level to position for a rally back into the 0.6050 resistance. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 0.5773 level next.
NZDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a downward trendline defining the bearish momentum. If we get a pullback, the sellers will likely lean on the trendline to position for more downside, while the buyers will look for a break higher to increase the bullish bets into new highs.
NZDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have another minor downward trendline defining the bearish momentum on this timeframe. If we were to get a pullback, the buyers will likely lean on it to position for the break below the 0.5850 level, while the buyers will look for a break higher to increase the bullish bets into the next major trendline. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the US PPI and the US Jobless Claims figures. Tomorrow, we conclude the week with the US Retail Sales data.
