Fundamental
Overview
The USD has been relatively
stronger against most major currencies since Friday as the markets went into
risk-off following some bad US data release. In fact, we got a weak US Flash Services PMI and soon after the long-term inflation expectations in the Final UMich Consumer
Sentiment survey jumped to a new 30-year high.
The risk-off sentiment
picked up after the jump in the long-term inflation expectations. The market
might be fearing that in case we get a slowdown, the Fed might not be fast
enough in cutting rates amid inflation remaining above target and uncomfortably
high long-term inflation expectations.
This is something to keep
in mind in light of the next NFP and CPI reports coming out before the March
FOMC decision where we will also get the updated SEP and Dot Plot.
On the NZD side, the RBNZ cut interest rates by 50 bps as expected last week but
Governor Orr sounded less dovish than expected
as the central bank will now slow down the pace of easing as they approach
their estimated neutral rate.
NZDUSD
Technical Analysis – Daily Timeframe
NZDUSD Daily
On the daily chart, we can
see that NZDUSD is pulling back again towards the key 0.57 support. That’s where we can expect the buyers to step
in with a defined risk below the support to position for a rally into the
0.5850 level next. The sellers, on the other hand, will want to see the price
breaking lower to start targeting the 0.55 handle.
NZDUSD Technical
Analysis – 4 hour Timeframe
NZDUSD 4 hour
On the 4 hour chart, we can
see that we have an upward trendline defining the bullish
momentum. If we get a pullback into it, we can expect the buyers to lean on the
trendline with a defined risk below it to position for the rally into the
0.5850 level next. The sellers, on the other hand, will look for a break below
the trendline to increase the bearish bets into the 0.55 handle.
NZDUSD Technical
Analysis – 1 hour Timeframe
NZDUSD 1 hour
On the 1 hour chart, we can
see that we have a minor resistance zone around the 0.5735 level. If we get a
pullback into the resistance, we can expect the sellers to step in with a
defined risk above the resistance to target a break below the major trendline and the support zone. The
buyers, on the other hand, will look for a break higher to increase the bullish bets into new
highs. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have the US Consumer Confidence
report. On Thursday, we get the latest US Jobless Claims figures, while on
Friday we conclude the week with the US PCE data.