NZDUSD Technical Analysis – Eyes on the FOMC decision | Forexlive

Fundamental
Overview

The USD continues to remain
under pressure against most major currencies despite higher Core PCE estimates
following the US CPI and PPI reports, and a better-than-expected Retail Sales data on Monday.

The market pricing for the
Fed went from expecting more than 80 bps of easing by year-end at the peak of
the risk-off sentiment to roughly 59 bps as of now. That didn’t provide a
pullback in the US Dollar selloff though. The focus now switched to the FOMC
decision due later today where the Fed is expected to keep rates steady.

On the NZD side, we haven’t
got much in terms of new data. As a reminder, the RBNZ cut interest rates by 50 bps as expected at the last
meeting but Governor Orr sounded less dovish than expected
as the central bank wants to slow the pace of easing as they approach their
estimated neutral rate. The market sees a total of 58 bps of easing by year-end
with a 70% probability of a 25 bps cut at the upcoming meeting.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD almost reached the key resistance zone around the 0.5850 level
recently. That’s where we can expect the sellers to step in with a defined risk
above the resistance to position for a drop back into the 0.55 handle. The
buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into the 0.60 handle next.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have an upward trendline defining the bullish momentum. If the
price were to pull back into the trendline, then we can expect the buyers to
lean on it to position for a rally above the resistance. The sellers, on the
other hand, will look for a break lower to increase the bearish bets into the
0.55 handle next.

NZDUSD Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a counter-trendline defining the current pullback. The sellers
will likely lean on it to keep targeting the major trendline, while the buyers
will look for a break higher to pile back in for a rally into new highs. The
red lines define the average daily range for today although they will likely
be unreliable given the FOMC event later today.

Upcoming
Catalysts

Today we have the FOMC Policy Decision.
Tomorrow, we get the latest US Jobless Claims figures.