Fundamental
Overview
The USD yesterday came
under pressure following the miss in the US ISM Manufacturing PMI which triggered a drop in Treasury
yields. In terms of market pricing, not much has changed as we still oscillate
between one and two rate cuts by the end of the year. Nonetheless, the data
reinforced the narrative that the next move is more likely to be a rate cut,
and that inflation is likely to keep coming back to target.
The NZD, on the other hand,
remains supported from the 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 has also been supported by the positive risk sentiment
in the markets which is generally good for commodity currencies like the NZD, so
if it this were to continue, we should see the Kiwi reach new highs.
NZDUSD
Technical Analysis – Daily Timeframe
NZDUSD Daily
On the daily chart, we can
see that NZDUSD remains in a solid uptrend amid an overall positive risk sentiment
regime due to lower inflation fears and resilient growth. The price today
pulled back a bit as we got some risk-off flows in the European session
although they weren’t caused by a fundamental catalyst, so we might see them fading
in the US session.
NZDUSD Technical
Analysis – 4 hour Timeframe
NZDUSD 4 hour
On the 4 hour chart, we can
see that the price pulled back into a trendline where we got a rejection as the
buyers stepped in with a defined risk below it to position for the continuation
of the uptrend. The sellers will want to see the price breaking lower to turn
the bias more bearish and pile in for a drop into the 0.6082 support.
NZDUSD Technical
Analysis – 1 hour Timeframe
NZDUSD 1 hour
On the 1 hour chart, we can
see that we have the 61.8% Fibonacci retracement level adding extra confluence
to the trendline support. Moreover, we can see that the price reacted several
times to the zone around the 0.6170 level, so a break above it should give the
buyers more conviction for a rally and increase the bullish momentum. The
sellers, on the other hand, will want to see the zone holding and the price falling
below the trendline to pile in with more conviction into new lows. The red
lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US Job Openings data. Tomorrow, we have the US ADP and the
US ISM Services PMI. On Thursday, we get the latest US Jobless Claims figures,
while on Friday we conclude the week with the US NFP report.