NZDUSD Technical Analysis – Watch these key levels

<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 at the last meeting.</li><li>The macroeconomic projections were revised higher,
and the Dot Plot showed that the FOMC still expects another rate hike by the
end of the year with less rate cuts projected 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. </li><li>The <a href="https://www.forexlive.com/news/us-september-cpi-37-yy-versus-36-yy-expected-20231012/">US CPI</a> last week beat expectations on the
headline figures, but the core measures came in line with forecasts and the
market’s pricing barely changed. </li><li>The <a href="https://www.forexlive.com/news/us-august-non-farm-payrolls-187k-vs-170k-expected-20230901/">labour market</a> remains fairly solid as seen once again yesterday
with the beat in<a href="https://www.forexlive.com/news/us-weekly-initial-jobs-claims-198k-versus-212k-expected-20231019/">Jobless Claims</a>, although continuing claims missed for a second
time in a row. </li><li>The US PMIs
recently showed that the US economy remains pretty resilient. </li><li>The <a href="https://www.forexlive.com/news/us-october-prelim-umich-consumer-sentiment-630-vs-672-expected-20231013/">University of Michigan Consumer Sentiment</a> report last Friday missed across the
board with the inflation expectations figures spiking back up.</li><li>The <a href="https://www.forexlive.com/news/us-september-retail-sales-07-versus-03-expected-20231017/">US Retail Sales</a> this week beat expectations by a big
margin with positive revisions to the prior figures.</li><li>The Fed members continue to cite elevated long-term
yields as a reason to proceed carefully and will likely pause in November as
well.</li><li><a href="https://www.forexlive.com/centralbank/feds-powell-fomc-is-proceeding-carefully-20231019/">Fed Chair Powell</a> yesterday highlighted the rise in long term yields
as well and the need to “proceed carefully”.</li><li>The market doesn’t expect the Fed to hike anymore.</li></ul><p>New Zealand:</p><ul><li>The RBNZ <a href="https://www.forexlive.com/centralbank/rbnz-leaves-its-cash-rate-target-unchanged-at-550-as-expected-20231004/">kept its official cash rate
unchanged</a> while
stating that demand growth continues to ease and it’s expected to decline
further with monetary conditions remaining restrictive. </li><li>The New Zealand <a href="https://www.forexlive.com/news/new-zealand-q3-cpi-18-qq-2-expected-20231016/">inflation data</a> this week missed expectations
supporting the RBNZ’s stance.</li><li>The <a href="https://www.forexlive.com/news/new-zealand-unemployment-rate-36-vs-expected-35-20230801/">employment</a> data surprised to the upside
recently.</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 <a href="https://www.forexlive.com/news/new-zealand-september-manufacturing-pmi-453-vs-prior-461-20231012/">Manufacturing PMI</a> continues to slide further into
contraction, but the <a href="https://www.forexlive.com/news/new-zealand-services-pmi-for-september-507-prior-471-20231015/">Services PMI</a> jumped back into expansion. </li><li>The RBNZ is expected to keep the
cash rate steady at the next meeting as well.</li></ul><p>NZDUSD Technical Analysis –
Daily Timeframe</p><p>On the daily chart, we can see that the NZDUSD pair
managed to eventually break the low following the miss in the New Zealand CPI
and the strong US data. The bearish momentum continues to be weak, but the bias
remains skewed to the downside. The recent drop got a bit overstretched as
depicted by the distance from the blue 8 <a href="https://www.forexlive.com/Education/technical-analysis-understanding-moving-averages-20220425/">moving average</a>. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move. </p><p>NZDUSD Technical Analysis –
4 hour Timeframe</p><p>On the 4 hour chart, we can see that we have a good
<a href="https://www.forexlive.com/Education/technical-analysis-support-and-resistance-20220405/">resistance</a> now
around the 0.5860 level where we can find the <a href="https://www.forexlive.com/Education/technical-analysis-confluence-20220318/">confluence</a> with the
<a href="https://www.forexlive.com/Education/technical-analysis-trendlines-20220406/">trendline</a>, the
38.2% <a href="https://www.forexlive.com/Education/technical-analysis-using-fibonacci-retracements-20220421/">Fibonacci retracement</a> level
and the red 21 moving average. This is where we can expect the sellers to keep
piling in with a defined risk above the trendline to target new lows. The
buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and target a rally back into the 0.60 handle. </p><p>NZDUSD Technical Analysis –
1 hour Timeframe</p><p>On the 1 hour chart, we can see more
closely the key levels to watch out for. From a risk management perspective,
the best spot for the sellers was the resistance around the 0.5860 level. Late
sellers may want to wait for the price to take out the low before joining the
trend but with a worse risk to reward setup. The buyers, on the other hand,
should wait for the break above the trendline before considering new longs. </p>

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