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In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDNZD for OCT 9th, 2024.
Key Takeaways
RBNZ cuts interest rates as expected: The Reserve Bank of New Zealand slashed interest rates by 50 basis points to 4.75% on Wednesday to support an economy teetering on the brink of recession, while keeping pace with peers such as the Federal Reserve. As market forward-looking analysis shows, economic data from the second quarter of the past shows that the current New Zealand economy is sluggish, and the New Zealand dollar has already priced in this rate cut in the past.
US inflation is the key: With the release of the September employment report that far exceeded expectations, the market believes that the Federal Reserve may continue to pay attention to inflation data. If this week’s CPI data unexpectedly rises, the Federal Reserve may be forced to turn its attention back to price pressures in the economy. According to CME’s interest rate watch tool, after the release of the September employment report, the probability of a 50-basis point rate cut by the Federal Reserve next month fell from 33% to zero, and traders are not even fully pricing in a 25-basis point rate cut now. Therefore, the importance of Thursday’s CPI reading to the Fed’s next move has increased.
Technical Analysis
Daily Chart Insights
(NZDUSD Daily Price Chart, Source: Ultima Markets MT4)
Stochastic oscillator: The indicator has entered the oversold area, and the fast line indicator shows signs of turning, suggesting that the indicator may have a reversal probability this week. Be alert to when the indicator sends a bullish signal.
Key price: The exchange rate touched the green 200-day MA yesterday and closed with a small positive line. Today’s candlestick is very important. If the exchange rate falls below yesterday’s low, which is also the MA support, the New Zealand dollar will open the space below and there is a probability of further decline. If the price is blocked from rising again at the close of today, there is a probability that the exchange rate will rebound next week.
H1 Chart Insights
(NZDUSD H1 Price Chart, Source: Ultima Markets MT4)
MACD: The indicator and the exchange rate form a serious divergence trend. The momentum column is rising, while the exchange rate is in a fluctuating downward trend. Wait for the momentum column to break through the 0 axis, when the exchange rate may have a clear reversal structure.
False breakout: The New Zealand dollar broke through the range twice this week, and in the current Asian session, the exchange rate shows signs of further falling below the rectangular range. Based on the daily cycle and the signal of the MACD indicator, it is not advisable to pay too much attention to the short trend and wait for the false breakout to appear and pay attention to whether there is a reversal signal.
Pivot Indicator
(NZDUSD M30 Price Chart, Source: Ultima Markets APP)
According to the Ultima Markets APP, the central price of the day is established at 0.6100,
Bullish Scenario: Bullish sentiment prevails above 0.6100, first target 0.6173, second target 0.6193;
Bearish Outlook: In a bearish scenario below 0.6100, first target 0.6066, second target 0.6046.
Conclusion
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