Technical Chart pick of the day: Hourly NZDUSD – Bullish
The NZD jumped after the RBNZ surprised markets with its new forecasts showing no chance of a cut this year. The central bank held rates steady as expected, but there was prior expectation that RBNZ Governor Orr would signal his preparedness to cut interest rates again, in order to cushion the economic impact of the coronavirus. The new forecast assumes that the overall economic impact in New Zealand will be of a short duration. A recovery in the housing market, a lift in inflation and falling unemployment numbers have led the RBNZ to change stance. In addition, the New Zealand Treasury have also recently announced a small fiscal stimulus, which could result in the RBNZ pausing further easing as well.
The USD steadied against a basket of currencies as Fed Chairman Powell assured that the US economy is in a good place during his address to US lawmakers on his semi-annual testimony. Powell remains of the view that the expansion in the US economy will continue and that it is appropriate to leave near term monetary policy unchanged. China’s economy will likely slow for at least a couple of quarters due to the coronavirus epidemic but the impact on the US economy is expected be limited. The recent spate of upbeat US data such as labour and service numbers has led Fed to keep interest rates steady.
· On a technical perspective, the trend is bullish, with prices above the 20, 40, 100 and 200 EMA.
· A bullish crossover occurred with the 20 EMA crossing the 100 EMA. This indicates that buying strength is present.
· Based on the pivot point analysis, prices are above the pivot level. This signifies bullishness.
Resistance: R1: 0.64228, R2: 0.64426, R3: 0.64850
Support: S1: 0.63804, S2: 0.63578, S3: 0.63154