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.
  • Fed Chair Powell maintained a neutral stance as he said that it was premature to react to the recent inflation data given possible bumps on the way to their 2% target.
  • The US CPI and the US PPI beat expectations for the second consecutive month.
  • The US Jobless Claims yesterday missed expectations slightly although Continuing Claims improved.
  • 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 Consumer Confidence missed expectations although the labour market details improved.
  • The market still expects the first cut in June, but the probability stands at just 60%.

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 rallied all the way back to retest the broken support zone now turned resistance where we had also the confluence of the 38.2% Fibonacci retracement level and the red 21 moving average. This is where the sellers stepped in with a defined risk above the Fibonacci level to position for a drop into new lows. The buyers, on the other hand, will want to see the price breaking higher to start targeting the 0.6218 resistance.

NZDUSD Technical Analysis – 4 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 4 hour

On the 4 hour chart, we can see that the price was diverging with the MACD falling into new lows, which is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, we got the break above the trendline and the reversal into the resistance following the US ISM Services PMI. The price has now pulled back into 0.60 handle where we can find the confluence of the 38.2% Fibonacci retracement level and the red 21 moving average. 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 resistance targeting a breakout. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows.

NZDUSD Technical Analysis – 1 hour Timeframe

NZDUSD Technical Analysis
NZDUSD 1 hour

On the 1 hour chart, we can see more closely the recent price action with the pair now trading at the support zone. If the price were to break above the black counter-trendline, we can expect the buyers to gain even more conviction and increase the bullish momentum, although a lot will depend on the US NFP report today as strong figures across the board will likely trigger a selloff in the pair.

Upcoming Events

Today we conclude the week with the US NFP report.