FUNDAMENTAL
OVERVIEW
USD:
The US dollar has been
trading mostly sideways after the hot US NFP report and the slightly soft US CPI data of last week. The market firmed up rate
cut bets with 60 bps of easing seen by year-end but overall, the data didn’t
really change anything in the bigger picture.
The bearish positioning in
the US dollar remains crowded, so it’s hard to see much more weakness unless
the data deteriorates significantly or we get some kind of negative shock in
the economy. This week, all the important stuff will be released on Friday as
we get the US Flash PMIs and the US Q4 GDP. We might also get the US Supreme
Court decision on Trump’s tariffs.
NZD:
On the NZD side, the
currency dropped across the board as the RBNZ held the OCR unchanged at 2.25%
as widely expected today but disappointed the hawkish expectations. In fact,
the market expected the central bank to bring the first rate hike forward to
December 2026, but the RBNZ didn’t met those expectations.
Moreover, the overall
message wasn’t as hawkish as expected, on the contrary, the central bank erred
on the cautious side and focused more on the weak spots in the economy and
downplayed the recent rise in inflation.
NZDUSD TECHNICAL
ANALYSIS – DAILY TIMEFRAME
NZDUSD – daily
On the daily chart, we can
see that the NZDUSD has been mostly consolidating near the highs after the
strong rally at the end of January. There’s not much we can glean from this
timeframe, so we need to zoom in to see some more details.
NZDUSD TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
NZDUSD – 4 hour
On the 4 hour chart, we can
see that we have a key swing point around the 0.5995 level acting as support. We
can expect the buyers to continue stepping in around this level with a defined
risk below it to keep targeting the 0.61 handle. The sellers, on the other
hand, will look for a break lower to pile in for a drop into the 0.5927 level
next.
NZDUSD TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
NZDUSD – 1 hour
On the 1 hour chart, we can
see that we have a minor downward trendline defining the current pullback into
the 0.5995 support. If we get a bounce, we can expect the sellers to lean on
the trendline with a defined risk above it to keep targeting a break below the
support and new lows. The buyers, on the other hand, will look for a break
higher to increase the bullish bets into the 0.61 handle next. The red lines
define the average daily range for today.
UPCOMING CATALYSTS
Today we have the FOMC Meeting Minutes. Tomorrow, we get the latest US
Jobless Claims figures. On Friday, we conclude the week with the US Q4 GDP, the
US PCE price index for December, the US Flash PMIs and the potential US Supreme
Court decision on Trump’s tariffs.
