USD

  • The Fed left interest rates unchanged as expected at the last meeting with basically no change to the statement. The Dot Plot still showed three rate cuts for 2024 and the economic projections were upgraded with growth and inflation higher and the unemployment rate lower.
  • The US CPI beat expectations for the third consecutive month, while the US PPI came in line with forecasts.
  • The US NFP beat expectations across the board although the average hourly earnings came in line with forecasts.
  • The US ISM Manufacturing PMI beat expectations by a big margin with the prices component continuing to increase, while the US ISM Services PMI missed with the price index dropping to the lowest level in 4 years.
  • The US Retail Sales beat expectations across the board by a big margin with positive revisions to the prior figures.
  • The market now expects the first rate cut in September.

NZD

  • The RBNZ kept its official cash rate unchanged as expected with no change as the central bank continues to state 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 sold off hard following another hot US CPI report and dropped into the key support zone around the 0.5870 level. This is where we can expect the buyers to step in with a defined risk below the zone to position for a rally into the trendline. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the low at 0.5780, although they will have a much better risk to reward setup around the trendline where they will also find the 50% Fibonacci retracement level for confluence.

NZDUSD Technical Analysis – 4 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 4 hour

On the 4 hour chart, we can see that we have a minor trendline defining the current downward momentum where we can also find the confluence of the 38.2% Fibonacci retracement level and the blue 8 moving average. If we get a pullback from the support zone, we can expect the sellers to lean on the minor trendline 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 major trendline around the 0.6040 level.

NZDUSD Technical Analysis – 1 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 1 hour

On the 1 hour chart, we can see that the price has been diverging with the MACD which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it could be a signal for a pullback into the minor trendline where we will find the sellers waiting to increase the bearish bets into new lows. If the price were to break higher though, a reversal will be confirmed, and we could see a rally into the 0.60 handle as the buyers will increase the bullish bets.

Upcoming Events

Tomorrow we have the New Zealand CPI, while on Thursday we get the latest US Jobless Claims figures.