TECHNICAL ANALYSIS
On the daily chart, we can see that the NZDUSD pair is currently pulling back after a huge selloff from the key 0.6389 resistance. On the 4 hour chart, we can see that on this timeframe we have an uptrend as the price is printing higher highs and higher lows. Although the price action remains messy, we have clear and defined levels. In fact, a break above the 0.5933 resistance should lead to rally into the next resistance around the 0.60 handle. That’s where we should find strong sellers piling in with a defined risk above the level to target new lows. On the 1 hour chart, we can see the range between the 0.5895 support and the 0.5933 resistance. The price has been stuck in this range for over a week and at some point we should see a breakout.
FUNDAMENTAL ANALYSIS
The RBNZ 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. The recent New Zealand inflation and employment data surprised to the upside but the PMIs continue to slide further into contraction. The wage growth has also missed expectations and it’s something that the central banks are watching closely. The recent New Zealand Retail Sales beat expectations although the data remains deeply negative.
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