Fundamental
Overview
The USD has been
generally under pressure since the benign US CPI report last week as the
hawkish expectations subsided and the market switched its focus from inflation
back to growth. This triggered a positive risk sentiment which is generally
negative for the greenback and benefited the other major currencies.
The NZD, on the
other hand, got a boost today from a hawkish RBNZ
decision where the central bank pushed further out the timing for a rate
cut and even added that they considered a rate hike. The currency should remain
supported amid the positive risk sentiment and a hawkish RBNZ for the time
being.
NZDUSD Technical
Analysis – Daily Timeframe
NZDUSD Daily
On the daily
chart, we can see that NZDUSD broke above the trendline recently following the US CPI report and consolidated
around the highs. This has opened the door for a rally into the 0.6217 swing
level and should give the buyers more conviction especially after the hawkish
RBNZ decision.
NZDUSD Technical
Analysis – 4 hour Timeframe
NZDUSD 4 hour
On the 4 hour
chart, we can see that from a risk management perspective, the buyers will have
a good risk to reward setup around the upward trendline where they will also
find the 50% Fibonacci
retracement
level for confluence. The sellers, on the other hand, will want to see the
price breaking lower to invalidate the bullish setup and position for a drop
into the 0.60 handle.
NZDUSD
Technical Analysis – 1 hour Timeframe
NZDUSD 1 hour
On the 1 hour
chart, we can see that we’ve been stuck in a range between the 0.6095 support and 0.6140 resistance. Another breakout to the upside
should see the buyers piling in more aggressively to extend the rally into the
0.6217 level although it’s unlikely that we will see it today as we have the
upper limit of the average daily
range right at the
resistance.
The FOMC Minutes or the US PMIs might boost the USD in the short term and provide a dip-buying opportunity as long as there are no worrying inflationary comments in the PMIs.
Upcoming
Catalysts
Today we have the FOMC Minutes late in the day although it’s
unlikely to be market moving. Tomorrow, we will get the New Zealand Q1 Retail
Sales, the US PMIs and the latest US Jobless Claims figures.
