Fundamental
Overview
The USD rallied across the
board last Friday following the hot US NFP report. The market priced out all the
aggressive rate cuts expectations and it’s now finally in line with the Fed’s
projections.
This week, the greenback
extended the gains as the market started to price in some chances of a pause in
November. The focus remains on the economic data.
Today we get the US CPI
report. We will likely need a hot report to see some more downside in the pair,
while a miss could see the pair rising on the market paring back the hawkish
expectations.
On the NZD side, the RBNZ
this week cut
interest rates by 50 bps as expected. The market is pricing an 83% probability
of another back-to-back 50 bps cut in November.
NZDUSD
Technical Analysis – Daily Timeframe
NZDUSD Daily
On the daily chart, we can
see that NZDUSD sold off all the way down to the key 0.6050 support
zone. This is where we can expect the buyers to step in with a defined risk below
the support to position for a rally into the 0.6217 resistance. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into the 0.5850 support next.
NZDUSD Technical
Analysis – 4 hour Timeframe
NZDUSD 4 hour
On the 4 hour chart, we can
see that we have a downward trendline defining the current bearish
momentum. The sellers will likely keep on leaning on the trendline to position
for further downside, while the buyers will want to see the price breaking
higher to pile in for a rally into new highs.
NZDUSD Technical
Analysis – 1 hour Timeframe
NZDUSD 1 hour
On the 1 hour chart, we can
see more clearly the recent price action. There’s not much else to add here as
the next direction will likely be decided by the US CPI report today. The red
lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US CPI report and the US Jobless Claims figures. Tomorrow,
we conclude with the US PPI and the University of Michigan Consumer Sentiment
report.