• The Fed left interest rates unchanged as
  expected with basically no change to the statement.
• Fed Chair Powell stressed
  once again that they are proceeding carefully as the full effects of policy
  tightening have yet to be felt.
• The recent US Core PCE came
  in line with expectations.
• The labour market is
  starting to show some weakness as Continuing Claims are now
  rising at a fast pace and the NFP data
  last Friday missed across the board.
• The US Consumer
  Confidence fell for the third consecutive month
  although the data beat expectations.
• The US ISM
  Manufacturing PMI last week missed expectations by a big
  margin, followed later on Friday with a disappointing ISM Services PMI,
  although the index remained in expansion.
• The market doesn’t expect the Fed to hike anymore.

New Zealand

• The RBNZ kept its official cash rate
  unchanged while
  stating that demand growth continues to ease and it’s expected to decline
  further with monetary conditions remaining restrictive.
• The New Zealand recent inflation data missed expectations supporting the
  RBNZ’s stance.
• The latest labour market report showed a notable increase in
  the unemployment rate and a slowdown in wage growth which is something that is
  likely to keep the RBNZ on the sidelines.
• The Manufacturing PMI continues to slide further into
  contraction, but the Services PMI jumped back into expansion.
• The market doesn’t expect the RBNZ
  to hike anymore.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the NZDUSD pair
surged into the key resistance levels
following the miss in the NFP data last Friday. The sellers stepped in around
the 0.60 handle and the price sold off paring back all the Friday gains. The
failed break above the trendline left
behind a fakeout, which is generally a reversal pattern.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a good
support zone around the 0.5915 level where there’s also the 38.2% Fibonacci retracement level
for confluence. This is
where the buyers are likely to step in with a defined risk below the level to
position for another rally into the highs and target a breakout. The sellers,
on the other hand, will want to see the price breaking lower to target the
support around the 0.5860 level.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that if
the price breaks below the 0.5915 support, the buyers will have another
opportunity to position for a rally with an even better risk to reward setup
around the 0.5860 support where there’s also the 61.8% Fibonacci retracement
level for confluence. The sellers, again, will increase the bearish bets in
case the price breaks below the 0.5860 support and target a new low.

Upcoming Events

This week is pretty empty on the data front with just
the US Jobless Claims on Thursday and the University of Michigan Consumer
Sentiment on Friday. The market is likely to focus on the US Jobless Claims on
Thursday given the recent weakness in the labour market data.

This article was written by FL Contributors at www.forexlive.com.