USD

  • The Fed left interest rates unchanged as expected at the last meeting and dropped the tightening bias in the statement.
  • The US CPI and the US PPI beat expectations for the second consecutive month.
  • The NFP report beat expectations on the headline number, but the unemployment rate and the average hourly earnings missed notably. Moreover, the US Jobless Claims beat expectations across the board with a big positive revision to Continuing Claims.
  • The latest US ISM Manufacturing PMI missed expectations by a big margin remaining in contraction with the US ISM Services PMI following suit but holding on in expansion.
  • The US Retail Sales missed expectations across the board although the data improved from the prior month.
  • The market sees basically a 50/50 chance of a hike in June now.

NZD

  • The RBNZ kept its official cash rate unchanged dropping the tightening bias and stating that the OCR will need to remain at restrictive level for a sustained period.
  • The latest New Zealand inflation data printed in line with expectations supporting the RBNZ’s patient stance.
  • The labour market report beat expectations across the board with lower than expected unemployment rate and higher wage growth.
  • The Manufacturing PMI improved in February remaining in contraction while the Services PMI increased further holding on in expansion.
  • The market expects the first cut in August.

NZDUSD Technical Analysis – Daily Timeframe

NZDUSD Technical Analysis
NZDUSD Daily

On the daily chart, we can see that NZDUSD fell all the way back to the key support zone around the 0.6050 level. The price is now a bit overstretched as depicted by the distance from the blue 8 moving average. In such instances, we can generally see a pullback into the moving average or some consolidation before the next move. This is where we can expect the buyers to step in with a defined risk below the support to position for a rally back into the highs with a great risk to reward setup.

NZDUSD Technical Analysis – 4 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 4 hour

On the 4 hour chart, we can see that we have a trendline around the 0.61 handle where we can also find the 38.2% Fibonacci retracement level for confluence. If we were to get a pullback from the support, we can expect the sellers to lean on the trendline with a defined risk above it to position for a break below the support with a better risk to reward setup. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and increase the bullish bets into the previous highs.

NZDUSD Technical Analysis – 1 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 1 hour

On the 1 hour chart, we can see that the latest leg lower is diverging with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it should be a signal for a pullback with the first resistance coming around the minor downward trendline. That’s where we can expect the sellers to step in to position for a continuation of the downtrend. The buyers, on the other hand, will want to see the price breaking higher to confirm a reversal and increase the bullish bets into the major trendline.

Upcoming Events

Today we have the FOMC rate decision on the agenda where the central bank is expected to keep rates unchanged. Tomorrow, we will get the latest US PMIs and Jobless Claims figures.