US:

• The Fed hiked by 25 bps as
  expected and kept everything unchanged at the last meeting.
• Fed Chair Powell reaffirmed their data dependency
  and kept all the options on the table.
• The US CPI last
  week came in line with expectations, so the market’s pricing remained roughly
  the same.
• The labour market
  displayed signs of softening although it remains fairly solid.
• The other important economic data like the ISM
  Services PMI, Jobless Claims and Retail Sales all beat expectations recently.
• The Fed members are leaning towards a pause in
  September and the next decision will still be dictated by the economic data.
• The market doesn’t expect the Fed to hike at the
  September meeting, but there’s now basically a 50/50 chance of a hike in
  November.

New Zealand:

• The RBNZ kept its official cash rate unchanged at the
  last meeting 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 continue to slide further into contraction.
• The wage growth has also missed
  expectations and it’s something that the central banks are watching closely.
• The recent New Zealand Retail Sales beat expectations although the data
  remains deeply negative.
• The RBNZ is expected to keep the
  cash rate steady at the next meeting.

NZDUSD Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the NZDUSD pair
is currently pulling back after a huge selloff from the key 0.6389 resistance. The divergence with the
MACD was a
signal that the bearish momentum was waning, and a correction was due. The red
21 moving average is
acting as a dynamic resistance at the moment, but a break above it should lead
to a rally into the 0.60 handle.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that on this
timeframe we have an uptrend as the price is printing higher highs and higher
lows. Although the price action remains messy, we have clear and defined
levels. In fact, a break above the 0.5933 resistance should lead to rally into the
next resistance around the 0.60 handle. That’s where we should find strong
sellers piling in with a defined risk above the level to target new lows.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see the range
between the 0.5895 support and the 0.5933 resistance. The price has been stuck
in this range for over a week and at some point we should see a breakout.

Upcoming Events

This week has just a couple of important economic
releases with the FOMC rate decision tomorrow being the highlight. The Fed is
expected to keep rates unchanged, and the market will focus more on the Dot
Plot and Fed Chair Powell’s press conference, although he’s likely to repeat
that they remain data dependent. Moving on to Thursday, we will see another US
Jobless Claims report, while on Friday we conclude the week with the US PMIs
data.

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