consistently surprising to the upside since the last FOMC, and this has led the
market to price in a more hawkish path for the Fed. In fact, Fed Chair Powell
and other FOMC members repeated that they expect two or more rate hikes this
year if the data remains strong. .
The RBNZ decided to pause
at the last meeting, and it should keep rates on hold as long as the inflation
numbers continue to show disinflation and the other top tier economic
indicators don’t show too much strength.
NZDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that the price
action displays a bullish bias as we got a selloff and then a V-shaped
recovery. This is generally a bullish signal, and the target should be the 0.63
handle where we can also find the downward trendline. A lot
will depend on today’s NFP report though.
NZDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see more closely what
happened with the V-shaped recovery. In fact, the price broke out of the support and
after a little consolidation, rallied back strongly above the support turned resistance towards
the 0.62 handle. The price is now struggling to break above this swing high level,
but the bias remains bullish as the price has also broken out of the bullish flag. Once we
see a break above the 0.62 handle, the buyers should pile in and target the
0.63 resistance.
NZDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
price is now rallying towards the 0.62 handle. We can expect the sellers
leaning on that 0.62 resistance with a defined risk above the high and target
the 0.61 handle as first target and then a break lower. Alternatively, the
sellers can also wait for the price to break below the minor upward trendline
before piling in.
Upcoming Events
Today we have the US
NFP report, and the market is solely focused on that. The labour market data we
got up to now has been solid and the market’s expectation is skewed to the
upside. In fact, we may have a sustained move only if we get a big beat or a
miss. In case of a beat, the USD should strengthen, while a miss should see the
USD offered across the board.
This article was written by FL Contributors at www.forexlive.com.