the US CPI report has led to a big US Dollar selling
across the board as the market expected the Fed to be finished with rate hikes
after the July meeting. The resilience in the labour market and the rising consumer sentiment have also led to expectations that
the US can really achieve a soft-landing, and this led to a positive risk
sentiment in the markets. The RBNZ, on the other hand, kept its official cash
rate unchanged while stating that it will remain at the restrictive level for
the foreseeable future to ensure that inflation comes down back to target.
NZDUSD Technical Analysis –
Daily Timeframe
On the daily chart, we can see that after rallying
into the key 0.6389 resistance, the
price was overstretched from the blue 8 moving average. In such
instances, we can generally see some consolidation or a pullback into the
moving average before the next move. In fact, the price has now pulled back
into the moving average and the previous swing level at 0.6305 where we are
likely to see a bounce.
NZDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that at the 0.63
round level we have also the 38.2% Fibonacci retracement level of
the entire upward move from the 0.6133 level. The buyers should step in here
with a defined risk below the level and target the break above the 0.6389. The
sellers, on the other hand, will want to see the price to break below the 0.63
handle to increase the selling pressure and target the 0.60 handle.
NZDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see that the
we had recently a rejection from the 0.6344 level. This will be an important
minor resistance. A break above it would confirm the bounce from the 0.63
handle and lead to more buying pressure. The last line of defence for the
buyers will be the broken trendline as a move below it would see the sellers in
control.
Upcoming Events
Today the market will
be particularly focused on the US Retail Sales data. There’s a high chance that
the USD will be pressured on multiple scenarios though. In fact, good data
should reinforce the soft-landing narrative, while a little miss may indicate a
healthy softening that is going to help easing prices. Only a big miss may give
the USD a tailwind as the market sentiment would switch into risk off. Another
important report will be the US Jobless Claims on Thursday as the market keeps
an eye on the labour market.
This article was written by FL Contributors at www.forexlive.com.