NZDUSD Technical Analysis – The USD does the opposite of what it was supposed to do
Fundamental OverviewThe US Dollar is now lower across the board as the market erased most of the greenback’s gains following Trump’s victory. This has been a puzzling reaction as Trump’s policies are likely to spur growth and potentially end the Fed’s easing cycle earlier than expected. We can argue that the market was already positioned for a Trump’s victory as we saw the greenback rallying for a couple of weeks leading into the US election. So, this might just be a “sell the fact” reaction and the market might now need more to keep bidding the USD.Another possible explanation is that the market is more focused on global growth now and that’s generally bearish for the greenback. We saw something similar in 2016 when the USD rallied strongly once Trump got elected but after a couple of months, it went into a 2-year long downtrend. The Fed for now remains neutral and on track to keep cutting rates. Yesterday, they cut by 25 bps as expected and given the overall neutral message, the market expects another 25 bps cut in December. Strong data from now until the December meeting though could change their plans for 2025. We have the US CPI report next week and that’s going to be a test. If the US Dollar sells off on hot data, then the market might be indeed focusing on global growth rather than the potential for an earlier pause in the Fed’s easing cycle. NZDUSD Technical Analysis – Daily TimeframeOn the daily chart, we can see that NZDUSD after a spike lower on Trump’s victory, reversed higher to test the key resistance zone around the 0.6050 level. This is where the sellers are stepping in to position for a drop into the 0.5850 level next. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 0.6217 resistance next.NZDUSD Technical Analysis – 4 hour TimeframeOn the 4 hour chart, we can see more clearly the recent price action with the price rejecting the key resistance zone. There’s not much more we can add here so we need to zoom in to see some more details.NZDUSD Technical Analysis – 1 hour TimeframeOn the 1 hour chart, we can see that we have an upward trendline defining the current bullish momentum and a support zone around the 0.5975 level where we can also find the 61.8% Fibonacci retracement level for confluence. If the price gets there, we can expect the buyers to step in with a defined risk below the trendline to position for the break above the resistance. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows. The red lines define the average daily range for today. Upcoming CatalystsToday we conclude the week with the University of Michigan Consumer Sentiment report. This article was written by Giuseppe Dellamotta at www.forexlive.com.
Fundamental Overview
The US Dollar is now lower across the board as the market erased most of the greenback’s gains following Trump’s victory. This has been a puzzling reaction as Trump’s policies are likely to spur growth and potentially end the Fed’s easing cycle earlier than expected.
We can argue that the market was already positioned for a Trump’s victory as we saw the greenback rallying for a couple of weeks leading into the US election. So, this might just be a “sell the fact” reaction and the market might now need more to keep bidding the USD.
Another possible explanation is that the market is more focused on global growth now and that’s generally bearish for the greenback. We saw something similar in 2016 when the USD rallied strongly once Trump got elected but after a couple of months, it went into a 2-year long downtrend.
The Fed for now remains neutral and on track to keep cutting rates. Yesterday, they cut by 25 bps as expected and given the overall neutral message, the market expects another 25 bps cut in December. Strong data from now until the December meeting though could change their plans for 2025.
We have the US CPI report next week and that’s going to be a test. If the US Dollar sells off on hot data, then the market might be indeed focusing on global growth rather than the potential for an earlier pause in the Fed’s easing cycle.
NZDUSD Technical Analysis – Daily Timeframe
On the daily chart, we can see that NZDUSD after a spike lower on Trump’s victory, reversed higher to test the key resistance zone around the 0.6050 level. This is where the sellers are stepping in to position for a drop into the 0.5850 level next. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the 0.6217 resistance next.
NZDUSD Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see more clearly the recent price action with the price rejecting the key resistance zone. There’s not much more we can add here so we need to zoom in to see some more details.
NZDUSD Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have an upward trendline defining the current bullish momentum and a support zone around the 0.5975 level where we can also find the 61.8% Fibonacci retracement level for confluence.
If the price gets there, we can expect the buyers to step in with a defined risk below the trendline to position for the break above the resistance. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into new lows. The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude the week with the University of Michigan Consumer Sentiment report. This article was written by Giuseppe Dellamotta at www.forexlive.com.
