Fundamental Overview
The dollar recently got a boost from another hot data set, as US job creation surprised to the upside and the ISM Services PMI index jumped to its highest level since 2023.
Market prices were little changed, however, and the Fed’s Waller yesterday kept hopes of a rate cut on hold, saying the pace would be driven by the progress of inflation. With the central bank’s focus back on inflation, next week’s US CPI report should have a bigger impact on interest rate expectations than tomorrow’s US NFP (barring large deviations).
On the NZD side, the RBNZ cut interest rates by 50 basis points as expected at its last meeting. Meanwhile we don’t have fresh data on New Zealand, but the market continues to price in a 76% chance of a 50 bps cut in February and a total of 124 bps cuts by the end of the year.
NZDUSD Technical Analysis – Daily Timeframe
NZDUSD Daily
On the daily chart we can see that NZDUSD is consolidating near recent lows with the 2022 low around the 0.5511 level now very close. We have a descending trendline that defines bearish momentum. Sellers will likely continue to rely on it to position for further declines, while buyers will look for a break higher to start targeting new highs.
NZDUSD Technical Analysis – 4 Hour Time Frame
NZDUSD 4 hours
On the 4-hour chart, we can’t add much more here as price action remains mostly range-bound as we continue to await US NFP and CPI reports. The resistance zone around the 0.5670 level will be a key level to watch if we get there in the coming days.
NZDUSD Technical Analysis – 1 Hour Time Frame
NZDUSD 1 hour
On the hourly chart, we can see that the price is trading in a support zone around the 0.5590 level. Buyers are likely to enter here to position for upside into the resistance zone, while sellers will look for the price to stay below support to continue pushing towards the 2022 lows. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we close the week with the US NFP report.