NZDUSD Technical Analysis

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

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

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

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.

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