Fundamental
Overview
The US CPI yesterday missed expectations across the board
but the details that feed into the Core PCE were less encouraging with early
estimates increasing. The price action in the USD has been mixed following the
data release as the markets are likely waiting for the US PPI today to get
better estimates for the PCE.
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 65 bps of easing by
year-end.
NZDUSD
Technical Analysis – Daily Timeframe
NZDUSD Daily
On the daily chart, we can
see that NZDUSD continues to range. From a risk management perspective, the
sellers will have a better risk to reward setup around the 0.5850 level to
position for a drop into new lows. 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
NZDUSD 4 hour
On the 4 hour chart, we can
see that we have a support zone around the 0.5680 level. If we get a
pullback into it, we can expect the buyers to step in with a defined risk below
the level to position for a rally into the 0.5850 level next. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into the lows.
NZDUSD Technical
Analysis – 1 hour Timeframe
NZDUSD 1 hour
On the 1 hour chart, we can
see that we have a minor resistance around the 0.5741 level. The sellers will
likely lean on the resistance with a defined risk above it to target the
support, while the buyers will look for a break higher to increase the bullish
bets into the 0.5850 level. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we get the US PPI data and the US
Jobless Claims figures. Tomorrow, we conclude the week with the University of
Michigan Consumer Sentiment report.
