consistently surprising to the upside since the last FOMC meeting and given the
Fed’s message of two or more rate hikes coming this year if the economy
performed as expected, the market started to price in a more hawkish path for
interest rates.
The RBNZ, on the other
hand, went on pause at the last meeting and unless we see the data surprise to
the upside, especially the inflation numbers, the central bank should remain on
hold.
NZDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that the price has
rebounded strongly from the 0.6050 level, and it now looks like the NZDUSD is
targeting the trendline at the
0.63 handle. The moving averages are
again about to crossover and we should see more upside more here, but a lot
will depend on the next NFP and CPI data.
NZDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that the break of
the 0.61 support resulted
in a fakeout and the price rallied back strongly above the resistance and it’s
now breaking above the upper bound of the bullish flag pattern.
The breakout should lead to even more conviction for the buyers and a rally
into the 0.63 handle where we find the previous swing high resistance and the
major trendline. The sellers are likely to step in there with a defined risk
above the level and target the 0.5987 support.
NZDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
price is now diverging with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. We should see the first rejection from the 0.62 swing high
resistance where the sellers are likely to pile in targeting a break below the
trendline and new lows. The buyers instead should wait for the price to come
into the trendline to position for more upside. Alternatively, the buyers may
pile in as soon as the price breaks above the 0.62 handle with conviction.
Upcoming Events
It’s Independence Day today for the US, so
liquidity will be thinner. In the following days we will have some important data releases like
the US Jobless Claims and ISM Services PMI on Thursday and the main event of
the week: the US NFP report on Friday.
This article was written by FL Contributors at www.forexlive.com.