Fundamental
Overview
The bullish momentum in the
US Dollar seems to be waning as GBPUSD couldn’t print a new low despite another
set of strong US data. In fact, the US Retail Sales beat expectations across the board
by a big margin and the US Jobless Claims came out much better than expected.
One caveat is that the
market has now priced out the aggressive rate cuts expectations and it’s almost
perfectly in line with the Fed’s projections. Therefore, we will likely need stronger
US data and especially signs of a pickup in inflation to see the market pricing
in an earlier pause in the Fed’s easing cycle.
The next big risk events
will be in November when we get the October data, the FOMC policy decision and
the US election.
On the NZD side, the New
Zealand Q3 CPI this week missed expectations solidifying the market’s view
for another 50 bps cut at the upcoming meeting and even pricing 12% chance of a
75 bps move.
NZDUSD
Technical Analysis – Daily Timeframe
NZDUSD Daily
On the daily chart, we can
see that NZDUSD is consolidating around the key 0.6050 support zone. This is where we can expect the buyers
to step in with a defined risk below the support to position for a rally into
the 0.6217 resistance. The sellers, on the other hand, will want to see the
price breaking lower to increase the bearish bets into the 0.5850 support next.
NZDUSD Technical
Analysis – 4 hour Timeframe
NZDUSD 4 hour
On the 4 hour chart, we can
see more clearly the rangebound price action as the bearish momentum waned. We
have the 0.61 handle acting as resistance here so a break above it will likely
see the buyers increase the bullish momentum into the 0.6217 resistance.
NZDUSD Technical
Analysis – 1 hour Timeframe
NZDUSD 1 hour
On the 1 hour chart, there’s
not much more we can glean from this timeframe as the market participants will
likely keep on playing the range until we get a breakout. The red lines define
the average daily range for today.