Fundamental
Overview
Since last Friday, the USD
has been mostly weak as Fed Chair Powell delivered a more dovish than expected speech at the Jackson Hole Symposium where
he basically kept the door open for a 50 bps cut at the September meeting. In
fact, the line saying that they will do everything they can to support a strong
labour market was key.
That pushed Treasury yields
lower and weighed on the greenback across the board. In fact, the recent
appreciation of the NZD has been mostly driven by the US Dollar side of the
equation. The more dovish RBNZ has been put aside from the market’s focus.The central bank is expected to cut rates by 25 bps at the October meeting and deliver a total of 74 bps of easing by year end (50 bps cut in December).
NZDUSD
Technical Analysis – Daily Timeframe
NZDUSD Daily
On the daily chart, we can
see that NZDUSD broke above the key resistance zone around the 0.6217 level opening
the door for a rally into the 0.6370 level. More buyers will likely start to
pile in around these levels to position for the rally into new highs. The
sellers, on the other hand, will want to see the price falling back below the
0.6217 level to position for a drop back into the 0.6050 zone.
NZDUSD Technical
Analysis – 4 hour Timeframe
NZDUSD 4 hour
On the 4 hour chart, we can
see that we have a minor trendline defining the current bullish
momentum. The buyers will likely keep on leaning on it with a defined risk
below it to position for new highs, while the sellers will want to see the
price breaking below the trendline and the 0.6217 level to start piling in for
a drop into the 0.6050 level.
NZDUSD Technical
Analysis – 1 hour Timeframe
NZDUSD 1 hour
On the 1 hour chart, we can
see that the price fell below the trendline for a short time this morning but
eventually erased all the losses. If the price breaks the recent high, we can
expect the bullish momentum to increase, while a break below the trendline and
the 0.6217 level should see the sellers taking control. The red lines define the
average daily range for today.
Upcoming
Catalysts
Tomorrow we get the latest US Jobless Claims figures, while on Friday, we
conclude the week with the US PCE report.