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. - Inflation measures
since then showed further disinflation. - The labour market
displayed signs of softening although it remains fairly solid. - Overall, the economic data started to surprise to
the downside lately. - Last week the ISM Services PMI and Jobless Claims
surprised to the upside. - The Fed members are leaning more towards a pause in
September. - The market doesn’t expect the Fed to hike at the September
meeting, but there’s now 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 are in contraction with the Services PMI recently 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 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 recent
bounce in the NZDUSD pair is struggling at the red 21 moving average where
the sellers are likely to be stepping in to position for further downside. The
bearish momentum seems to be waning and we might see a bigger correction into
the 0.60 handle. If the US data comes out much stronger than expected though,
the pair should keep on depreciating.
NZDUSD Technical Analysis –
4 hour Timeframe
On the 4 hour chart, we can see that we have a divergence with the
MACD which is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, the target for the pullback should be the 0.60 resistance, but the
buyers will need to break above the 0.5930 level to start targeting the 0.60
handle. In fact, we can expect the buyers to pile in around the 0.59 handle
where we have also the confluence with the
red 21 moving average. If the price breaks through the support though, the
sellers are likely to extend the drop into the 0.5860 low.
NZDUSD Technical Analysis –
1 hour Timeframe
On the 1 hour chart, we can see clear
support and resistance levels. The buyers should buy the supports, while the
sellers should sell the resistances. The current price action into the 0.5900
support seems to be forming a bullish flag
pattern, so that will also be something to watch.
Upcoming Events
This week we have many important events beginning with
the US CPI tomorrow, which is expected to show an increase in headline
inflation but further disinflation in the core measure. On Thursday, we will
see the US Jobless Claims, PPI and Retail Sales data. Finally on Friday, we get
the University of Michigan Consumer Sentiment report.
This article was written by FL Contributors at www.forexlive.com. Source