Fundamental
Overview
The USD yesterday weakened
across the board following soft US Jobless Claims and ISM Services PMI reports. Overall, the data didn’t
change much in terms of interest rates expectations, but it reinforced the view
that the Fed is going to deliver at least two rate cuts by the end of the year.
The NZD, on the other hand,
has been under pressure mainly due to the US Dollar strength last week which
has been influenced more by quarter-end flows rather than something
fundamental. This week, the US Dollar is back on the defensive as the market
continues to trade the soft-landing narrative.
NZDUSD
Technical Analysis – Daily Timeframe
NZDUSD Daily
On the daily chart, we can
see that NZDUSD probed below the key support around the 0.6082 level last week but
eventually failed to sustain the breakout. The buyers seem now back in control
and the first target should be 0.6217 resistance.
The sellers, on the other
hand, will want to see the price breaking lower again to gain more conviction
and increase the bearish bets into the 0.60 handle next.
NZDUSD Technical
Analysis – 4 hour Timeframe
NZDUSD 4 hour
On the 4 hour chart, we can
see that the price yesterday broke above the downward trendline
which was defining the bearish momentum. The buyers increased the bullish bets
as they gained a bit more conviction to position for a rally back into the
0.6217 resistance.
NZDUSD Technical
Analysis – 1 hour Timeframe
NZDUSD 1 hour
On the 1 hour chart, we can
see that we have a good support zone around the 0.61 handle where we can find
the confluence
of the 50% Fibonacci
retracement level and the upward minor trendline. If we do get a pullback
from the current levels, we can expect the buyers to step in around the support
to position for a rally into the resistance with a better risk to reward setup.
The sellers, on the other
hand, will want to see the price breaking below the trendline and the 0.6080
zone to regain control and increase the bearish bets into the 0.60 handle next.
The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow we conclude the week with the US NFP report where the data is expected
to show 180K jobs added in June and the Unemployment Rate to remain unchanged
at 4.0%.