NZDUSD Technical Analysis

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

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

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

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.

This article was written by FL Contributors at www.forexlive.com.