NZDUSD Technical Analysis – Key support in sight

<p>US:</p><ul><li>The Fed <a href="https://www.forexlive.com/centralbank/the-fomc-keeps-the-target-fed-funds-range-at-525-to-550-20230920/">left interest rates unchanged</a> as
expected.</li><li>The macroeconomic projections were revised higher
as the economy showed much stronger resilience than expected and the Dot Plot
showed that the majority of members still expects another rate hike by the end
of the year with less rate cuts in 2024.</li><li><a href="https://www.forexlive.com/centralbank/highlights-from-the-fed-chair-powells-press-conference-after-september-rate-decision-20230920/">Fed Chair Powell</a>
reaffirmed their data dependency but added that they will proceed carefully as
they are trying to find the optimal level of rates. Powell also added that the
soft landing is not the base case at the moment, although they are aiming for
it.</li><li>The latest <a href="https://www.forexlive.com/news/us-august-cpi-06-mm-versus-06-mm-expected-20230913/">US CPI</a> came
in line with expectations, so the market’s pricing remained roughly the same. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a>
displayed signs of softening although it remains fairly solid as seen also last
week with the strong beat in <a href="https://www.forexlive.com/news/us-initial-jobless-claims-201k-versus-225k-estimate-20230921/">Jobless Claims</a>. </li><li>The market doesn’t expect the Fed to hike again at
the moment.</li></ul><p>New Zealand:</p><ul><li>The <a href="https://www.forexlive.com/centralbank/reserve-bank-of-new-zealand-leave-cash-rate-unchanged-at-55-as-widely-expected-20230816/">RBNZ</a> kept its official cash rate unchanged at the
last meeting while stating that it will remain at the restrictive level for the
foreseeable future to ensure that inflation comes down back to target. </li><li>The recent <a href="https://www.forexlive.com/news/new-zealand-q2-cpi-11-qq-vs-expected-10-20230718/">New Zealand inflation</a> and <a href="https://www.forexlive.com/news/new-zealand-unemployment-rate-36-vs-expected-35-20230801/">employment</a> data surprised to the upside but
the PMIs continue to slide further into contraction. </li><li>The wage growth has also missed
expectations and it’s something that the central banks are watching closely. </li><li>The recent New Zealand <a href="https://www.forexlive.com/news/new-zealand-q2-retail-sales-10-qq-expected-26-20230822/">Retail Sales</a> beat expectations although the data
remains deeply negative. </li><li>The RBNZ is expected to keep the
cash rate steady at the next meeting.</li></ul><p>NZDUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that the NZDUSD pair
has retraced all the way back to the key <a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> around
the 0.60 handle and sold off as the USD got another boost from both the more
hawkish than expected FOMC dot plot and economic data. The trend remains
bearish, although the recent <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a>
crossover could be an early sign of bottoming. </p><p>NZDUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that the <a href="https://www.forexlive.com/Education/technical-analysis-understanding-divergence-20220429/">divergence</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-understanding-macd-20220427/">MACD</a> of the
last leg lower signalled a weakening in momentum and it’s generally followed by
pullbacks or reversals. In this case, we got a pullback to the resistance,
while a break above it would confirm a reversal and take the NZDUSD to the next
resistance around the 0.6117 level. At the moment, the price is testing a <a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a> where we
can expect the buyers to step in with a defined risk below it to position for
another rally into the resistance and target a breakout. The sellers, on the
other hand, will want to see the price breaking lower to pile in even more and
target a new low.</p><p>NZDUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see that the
sellers will have two options to short the pair in case of a bounce on the
trendline. The first one will be around the 0.5940 <a href="https://www.forexlive.com/Education/technical-analysis-polarity-20220408/">support turned
resistance</a> where there’s also the 38.2% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci
retracement</a> level. The second one will be around the
downward trendline with the 61.8% Fibonacci retracement level for <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a>. The
buyers, on the other hand, will want to see the price breaking above the
downward trendline to pile in even more and target the breakout of the
resistance at 0.60.</p><p>Upcoming Events</p><p><a href="https://www.forexlive.com/EconomicCalendar">Tomorrow</a> we
will see the latest US Jobless Claims data, which continues to be very
important for the Fed and the market. Strong data should keep on supporting the
USD, while weak readings are likely to weigh on the greenback in the short
term. On Friday, we conclude the week with the latest US PCE report. </p>

This article was written by FL Contributors at www.forexlive.com.