FundamentalOverview
The USD yesterday weakenedacross the board following soft US Jobless Claims and ISM Services PMI reports. Overall, the data didn’tchange much in terms of interest rates expectations, but it reinforced the viewthat the Fed is going to deliver at least two rate cuts by the end of the year.
The NZD, on the other hand,has been under pressure mainly due to the US Dollar strength last week whichhas been influenced more by quarter-end flows rather than somethingfundamental. This week, the US Dollar is back on the defensive as the marketcontinues to trade the soft-landing narrative.
NZDUSDTechnical Analysis – Daily Timeframe
On the daily chart, we cansee that NZDUSD probed below the key support around the 0.6082 level last week buteventually failed to sustain the breakout. The buyers seem now back in controland the first target should be 0.6217 resistance.
The sellers, on the otherhand, will want to see the price breaking lower again to gain more convictionand increase the bearish bets into the 0.60 handle next.
NZDUSD TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that the price yesterday broke above the downward trendlinewhich was defining the bearish momentum. The buyers increased the bullish betsas they gained a bit more conviction to position for a rally back into the0.6217 resistance.
NZDUSD TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, we cansee that we have a good support zone around the 0.61 handle where we can findthe confluenceof the 50% Fibonacciretracement level and the upward minor trendline. If we do get a pullbackfrom the current levels, we can expect the buyers to step in around the supportto position for a rally into the resistance with a better risk to reward setup.
The sellers, on the otherhand, will want to see the price breaking below the trendline and the 0.6080zone to regain control and increase the bearish bets into the 0.60 handle next.The red lines define the average daily range for today.
UpcomingCatalysts
Tomorrow we conclude the week with the US NFP report where the data is expectedto show 180K jobs added in June and the Unemployment Rate to remain unchangedat 4.0%.
