NZDUSD, H4
The NZDUSD pair has fallen over 200 pips from 0.7130 last week to lows on Monday at 0.6925, following the Fed signaling that a rate hike is likely to take place earlier than expected. This is in line with the Reserve Bank of New Zealand’s (RBNZ) plans to raise interest rates from 0.25% to 0.5% by September 2022 and keep the official cash rate at 1.5% until the end of 2023, however, the committee has stated that nothing will change until inflation and employment are on track. In Q1 2021, New Zealand inflation rose to 1.5% and unemployment fell to 4.7%. The mantra from the RBNZ is in tune with the major central banks globally.
The NZDUSD pair has fallen below the 0.7000 level for the first time in more than two months. As a result, the pair continues to be under pressure this week. Support is at last week’s low at 0.6920, where it breaks down to find a rounded support at 0.6900.
However, the opening price jumped slightly this week. This shows a bullish harami candlestick pattern in the Day timeframe, meaning we could see the NZDUSD pair reverse up this week. If the key resistance at 0.7000 is broken up, the next resistance will be in the 0.7065 zone, slightly above the 200 MA, which is a zone the pair traded around at the beginning of April.
Highlights on this week’s economic calendar begins with a statement from Fed Chairman Powell tonight about the emergency loan program and ongoing policies when he testifies in Congress from 18:00 GMT, followed by housing data and PMI weekly US economic numbers tomorrow and New Zealand’s trade balance figure on Friday.
Click here to access our Economic Calendar
Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand
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