FundamentalOverview

The US Dollar continues toconsolidate despite the higher-than-expected inflation figures and a lessdovish Powell last week. The market’s pricing remained largely unchanged atthree rate cuts by the end of 2025.

This might be a signal thatthe market is now fine with the current pricing, and we will need strongerreasons to price out the remaining rate cuts. This could lead to some generalUS Dollar weakness in the short term.

On the NZD side, the marketis pricing an 80% chance of a 50 bps cut at the upcoming meeting and a total of142 bps of easing by the end of 2025. Inflation is back in the RBNZ’s targetrange, so the central bank can focus on growth now especially with the unemploymentrate continuing to climb.

NZDUSDTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that NZDUSD bounced from the key supportaround the 0.5850 level and rallied into the major trendlinewhere we got some rejection as the sellers stepped back in. The buyers willwant to see the price breaking above the trendline to increase the bullish betsinto the 0.6050 resistance, while the sellers will look for a break below the0.5850 support to target the 0.5773 low.

NZDUSD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the price rejected the swing low level at 0.5912 near the majortrendline as the sellers stepped in with a defined risk above the trendline totarget the break below the 0.5850 support. There’s not much else we can add hereas the buyers will need a break above the trendline to gain more conviction forfurther upside.

NZDUSD TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee that we have a minor support zone around the 0.5780 level. This is where wecan expect the buyers to step in with a defined risk below the support toposition for the break above the major trendline with a better risk to reward setup.The sellers, on the other hand, will want to see the price breaking lower to increasethe bearish bets into new lows. The red lines define the average daily range for today.

UpcomingCatalysts

Tomorrow,we get the latest US Jobless Claims figures, while on Friday we conclude theweek with the US PMIs.