Fundamental
Overview
The US Dollar continues to
consolidate despite the higher-than-expected inflation figures and a less
dovish Powell last week. The market’s pricing remained largely unchanged at
three rate cuts by the end of 2025.
This might be a signal that
the market is now fine with the current pricing, and we will need stronger
reasons to price out the remaining rate cuts. This could lead to some general
US Dollar weakness in the short term.
On the NZD side, the market
is pricing an 80% chance of a 50 bps cut at the upcoming meeting and a total of
142 bps of easing by the end of 2025. Inflation is back in the RBNZ’s target
range, so the central bank can focus on growth now especially with the unemployment
rate continuing to climb.
NZDUSD
Technical Analysis – Daily Timeframe
NZDUSD Daily
On the daily chart, we can
see that NZDUSD bounced from the key support
around the 0.5850 level and rallied into the major trendline
where we got some rejection as the sellers stepped back in. The buyers will
want to see the price breaking above the trendline to increase the bullish bets
into the 0.6050 resistance, while the sellers will look for a break below the
0.5850 support to target the 0.5773 low.
NZDUSD Technical
Analysis – 4 hour Timeframe
NZDUSD 4 hour
On the 4 hour chart, we can
see that the price rejected the swing low level at 0.5912 near the major
trendline as the sellers stepped in with a defined risk above the trendline to
target the break below the 0.5850 support. There’s not much else we can add here
as the buyers will need a break above the trendline to gain more conviction for
further upside.
NZDUSD Technical
Analysis – 1 hour Timeframe
NZDUSD 1 hour
On the 1 hour chart, we can
see that we have a minor support zone around the 0.5780 level. This is where we
can expect the buyers to step in with a defined risk below the support to
position for the break above the major trendline with a better risk to reward setup.
The sellers, on the other hand, will want to see the price breaking lower to increase
the bearish bets into new lows. 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 PMIs.