The US Dollar saw a strong rally last Friday after a positive US NFP report, leading to a shift in market expectations regarding rate cuts. This week, the greenback continued to rise as the possibility of a pause in rate cuts in November was considered. The focus is now on economic data, with the US CPI report being particularly important today. A positive report could push the NZDUSD pair down further, while a miss may lead to an increase as expectations of hawkish measures are scaled back.
On the New Zealand side, the RBNZ cut interest rates by 50 bps this week, with the market pricing in an 83% chance of another cut in November. Looking at the technical analysis for NZDUSD, on the daily chart, the pair reached a key support zone at 0.6050, where buyers may step in for a potential rally to 0.6217 resistance. Sellers will be looking for a break below this support to increase bearish bets towards 0.5850 support.
On the 4-hour chart, a downward trendline indicates current bearish momentum, with sellers likely to continue leaning on the trendline for downside potential. Buyers, on the other hand, will be looking for a break higher to push for new highs. The 1-hour chart shows that the next direction for the pair may be determined by the US CPI report, with the red lines indicating the average daily range for the day.
Upcoming catalysts include the US Jobless Claims figures today, followed by the US PPI and the University of Michigan Consumer Sentiment report tomorrow. These reports will provide further insight into the economic conditions that could impact the movement of the NZDUSD pair in the near future.
