Fundamental
Overview
The USD weakened across the
board recently following soft ADP data and a Bloomberg report saying that Hassett emerged as the
frontrunner for the Fed Chair position.
The greenback was already
under some pressure caused by Fed’s Williams endorsement for a December cut last Friday. The
probability for a December cut is now at 76%, which generally makes it a done
deal.
We won’t get much data
before the FOMC meeting, so the focus will likely be mainly on jobless claims
and ADP data, which haven’t been showing any strong improvement. Weak data
should keep weighing on the greenback, while strong data could provide some
short-term support. At the end of the day though, it’s all about the FOMC
decision now and the following NFP and CPI reports.
On the NZD side, the RBNZ cut
the OCR to 2.25% as expected and signalled the end of the easing cycle. The
central bank indicated that the OCR would remain at the current level through
2026. This gave the New Zealand dollar a boost as the market priced out the
expected easing in 2026.
NZDUSD
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that the NZDUSD rebounded strongly from the lows following renewed dovish
Fed bets and the RBNZ decision. We can see that we have a downward trendline
that could act as resistance. The sellers will likely lean on the trendline
with a defined risk above it to position for a drop into the April lows. The
buyers, on the other hand, will look for a break higher to increase the bullish
bets into the 0.5850 resistance next.
NZDUSD Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we have a strong support zone around the 0.5690 level. If we get a
pullback, we can expect the buyers to step in there with a defined risk below
the support to position for a break above the trendline. The sellers, on the
other hand, will look for a break lower to increase the bearish bets into new
lows.
NZDUSD Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, there’s
not much we can add here as the buyers will look for a bounce around the
support, while the sellers will look for a break. The red lines define the average daily range for today.
This article was written by Giuseppe Dellamotta at investinglive.com.
