the first time after 14 consecutive beats. The USD weakened across the board,
but it doesn’t look like the NFP is the main culprit. In fact, the market’s
expectations for a 25 bps hike at the July FOMC meeting remained unchanged as
the other details in the report were solid and the average hourly earnings
ticked higher.
The RBNZ, on the other
hand, 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. In fact, the NZDUSD strength
is more about the USD weakness.
NZDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that NZDUSD is still
eyeing the 0.63 handle where we have the confluence with the
trendline and the
78.6% Fibonacci retracement level.
After the V-shaped recovery seen at the end of June, the bullish momentum
started to wane as the market is eagerly waiting to see the US CPI report
tomorrow.
NZDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that NZDUSD
rejected the swing high level at 0.6222. The bullish bias remains though as the
price has been printing higher lows. We might see a break to the upside soon,
but the US CPI report is a big risk. The measured target of the bullish flag that was
broken the last week remains the 0.63 handle.
NZDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
price is getting closer to the black trendline. This trendline defines the
ascending triangle pattern, so we should see the buyers stepping in here to
target a break to the upside and eventually a rally to the 0.63 handle. If the
price breaks below the trendline, the pattern would be invalidated and we
should see a fall into the 0.6120 support and, upon a further break, a selloff
towards the 0.60 handle.
Upcoming Events
Tomorrow all eyes will be on the US CPI
report. A miss to the expectations, especially on the core numbers, should
weaken the USD as the market would price out the hawkish bets and even bring
forward rate cuts bets. On the other hand, if the data beats forecasts, we
should see the USD strength across the board as the market would price in a
more hawkish Fed. We conclude the week with the US Jobless Claims on Thursday
and the University of Michigan Consumer Sentiment report on Friday.
This article was written by FL Contributors at www.forexlive.com.