FundamentalOverview

Last Thursday, WSJ’sTimiraos published an article which seemed suggesting that a 50 bps cut wasstill being discussed. The market responded by raising 50 bps cut probabilitiesto around 40% from 13% before the news.

Nick Timiraos is considereda Fed “insider”, so the market is attentive to all of his pieces concerningpotential Fed decisions. Since then, the 50 bps camp got more vocal and theprobability for the Fed to cut by 50 bps at today’s meeting stands now around 61%with a total of 115 bps of easing by year-end.

This repricing weakened theUS Dollar across the board as Treasury yields fell further. Once we are donewith the Fed decision though, the focus will switch back to the economic data.In case we start to see better figures, the market might start to pare back theaggressive easing expected in 2025 supporting the greenback in the short-term.

For the RBNZ, the marketsees a 77% probability of a 25 bps cut at the upcoming meeting and a total of 83bps of easing by year-end.

NZDUSDTechnical Analysis – Daily Timeframe

On the daily chart, we cansee that NZDUSD is now back at the key 0.6217 resistance. This is where we can expect thesellers to step in with a defined risk above the level to position for a drop intothe 0.6050 support zone. The buyers, on the other hand, will want to see theprice breaking higher to position for a rally into the 0.6370 level.

NZDUSD TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that we have an upward trendlinedefining the current bullish momentum. The buyers will likely keep on leaningon it to position for new highs, while the sellers will look for a break lowerto increase the bearish bets into the 0.6050 support.

NZDUSD TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, we cansee more clearly the recent price action with the greenback feeling thepressure from the 50 bps cut expectations since last Thursday. The red linesdefine the average daily range for today.

UpcomingCatalysts

Today, we have the FOMC Rate Decision and tomorrow, we get the New Zealand Q2 GDP and the latest USJobless Claims figures.