US:
- The Fed hiked by 25 bps as
expected and kept everything unchanged. - Fed Chair Powell reaffirmed their data dependency
and kept all the options on the table. - The US economic data keeps on surprising to the
upside, but inflation expectations and CPI readings continue to show
disinflation with the last two Core CPI M/M figures
coming in at 0.16%. - The US PMIs missed
expectations across the board last week, while the US Jobless Claims remained
solid. - Fed Chair Powell’s speech at the Jackson Hole Symposium was
mostly in line with what he said previously but he stressed on the need to be
careful going forward and that continued strength in the labour market may
require further rate hikes. - At the moment, the market doesn’t expect another
hike from the Fed, but the next NFP and CPI data will be crucial to confirm or
change this view.
New Zealand:
- The RBNZ 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. - The recent New Zealand inflation and employment data surprised to the upside but
the PMIs are in contraction with the Services PMI last week plunging into
contraction. - The wage growth has also missed
expectations and it’s something that the central banks are watching closely for
second round effects. - The New Zealand Retail Sales beat expectations although remain
deeply negative. - The RBNZ is expected to keep the
cash rate steady at the next meeting.
NZDUSD Technical Analysis –
Daily Timeframe
NZDUSD Daily
On the daily chart, we can see that NZDUSD broke
below the 0.5987 low and opened the door for a fall into the 0.5514 level. The
pair started to consolidate as the market awaits key economic data to decide
where to go next. The bearish trend remains intact as the price keeps printing
lower lows and lower highs and the moving averages are
crossed to the downside.
The 0.5987 level will be key to watch as we can
also find the red 21 moving average for confluence. The
sellers are likely to pile in there with a defined risk above the level to
target new lows. The buyers, on the other hand, will need the price to break
decisively above the level to switch the bias from bearish to bullish and
target a bigger correction towards the 0.61 handle.
NZDUSD Technical Analysis –
4 hour Timeframe
NZDUSD 4 hour
On the 4 hour chart, we can see that the price has
been diverging with the
MACD for a
long time and this is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, we got many pullbacks with the downward trendline defining
the downtrend. A breakout to the upside would be a bad omen for the sellers as
the chances of a reversal would increase. The last line of defence will be the
resistance at 0.5987 level.
NZDUSD Technical Analysis –
1 hour Timeframe
NZDUSD 1 hour
On the 1 hour chart, we can see that we
have a mini range between the 0.5895 support and
the 0.5925 resistance. A break to the upside should see the buyers piling in
and target the 0.5987 resistance with a further breakout opening the door for a
rally into the 0.61 handle. Conversely, a break to the downside should see more
sellers piling in and take the pair to new lows.
Upcoming Events
This week is an important one given that we will see
many key labour market data for the US, including the NFP, before the next FOMC
meeting. Today, we have the US Consumer Confidence and the US Job Openings
reports. Tomorrow, we have the US ADP report. Moving on to Thursday, we will
see the US Jobless Claims and the US PCE data. Finally, we conclude the week
with the US NFP and the ISM Manufacturing PMI on Friday. Although the Fed keeps
all the options on the table, it’s also leaning more towards a pause in September,
so we will need strong data to make the market to expect a hike at the upcoming
meeting.