Technical Outlook

-NZDUSD’s rally from 0.6050 faces a downturn, signaling potential declines towards 0.6070 if it breaks below the immediate target at 0.6140.

-AUDUSD, currently at 0.6550, could reach 0.6650 if it surpasses resistance at 0.6595, but may fall to 0.6500 if it drops below 0.6550.

NZ (NZD): New Zealand Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) governor decides where to set the rate after consulting senior bank staff and external advisers. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

A higher than expected rate is positive/bullish for the NZD, while a lower than expected rate is negative/bearish for the NZD.

The previous reading was 5.50 %, in line with the expectations. The next report is due on February 27, 2024 at 01:00 GMT. Its forecast also stands at 5.50%.

NZDUSD Technical Analysis:

The NZDUSD pair witnessed some significant trading lately last week, with a strong bullish move from an important support level at 0.6050 as marked in the daily chart. As the price broke the resistance level of 0.6160, which also coincides with the 38.2% Fibonacci retracement level, the bulls gained further impetus.

Nevertheless, as the new trading week begins, there is a change in the momentum, which is evident through a clear downturn at the open. This shift hints at a forthcoming softening in the previously bullish trend, with the next target being at the 0.6140 level. A break below the mentioned zone could lead to intensification of bearish pressures with a potential price reduction to 0.6070.

The pair’s direction will depend upon whether it manages to stay above or below the 0.622 level. It  is a crucial point to watch – any successful move above this level will undermine the current bearish bias and signal the revival of the bullish trend. Contrarily, if the price does not move beyond the indicated level, the downward trend may be affirmed.

Pivot Points: NZDUSD

US (USD): U.S. Core PCE Price Index YoY

The Core PCE price Index is the less volatile measure of the PCE price index which excludes the more volatile and seasonal food and energy prices. The impact on the currency may go both ways, a rise in inflation may lead to a rise in interest rates and a rise in local currency, on the other hand, during recession, a rise in inflation may lead to a deepened recession and therefore a fall in local currency.

The previous actual data was 2.9% worse than the forecast of 3.0% The upcoming report is due on February 29, 2024 at 13:30 GMT and its forecast figure stands at 2.8%.

AUDUSD Technical Analysis:

The AUDUSD is currently hovering at the critical level of 0.6550. It is looking at an immediate resistance zone around 0.6595, which is not only last week’s high but also touches the psychological level of 0.6600. The next important resistance is formed at the 38.2% Fibonacci retracement area and the peak of February, both around 0.6606 to 0.6610. The AUD/USD pair could jump over this threshold to reach the 0.6650 mark.

On the contrary, if the pair starts to weaken, falling below the 0.6550 level, it may test the nine-day Exponential Moving Average at 0.6544 again. Provided that the prices keep on sliding, the next support can be found at the 0.6500 level, which is also a psychological barrier for the market.

Pivot Points: AUDUSD

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