- In today’s analysis, we see that we are dancing around a couple of major moving averages.
- It is because of this, and the fact that we have the core PCE price index numbers coming out on Friday, that I think we are currently trying to sort out what the next big move is going to be.
- After all, we had just dropped underneath the 200-day EMA only to turn around and show signs of life again.
At this point in time, it looks like there is at least an attempt to support the New Zealand dollar, but I think most of this is probably related to the idea that the core PC price index numbers coming out could be a big mover of markets. After all, it is the Federal Reserve's favorite inflation metric to determine what's going on with the US consumer and therefore it has a major influence on how they choose to proceed with monetary policy.
Technical Analysis
When I look at the technical analysis, if we can break above the highs of the candlestick from the previous session on Wednesday, then I think the New Zealand dollar has a real shot at bouncing toward the 0.62 level. On the other hand, if we break down below 0.6050, then it's likely that the New Zealand dollar starts to really tank. We could see a move down to the 0.5850 level.
Regardless, NZD/USD is a market that I think continues to see a lot of noisy behavior. And that does make a certain amount of sense due to the fact that the New Zealand dollar is a highly sensitive commodity currency. Therefore, we will be paying close attention to commodities and of course risk appetite in general, which inflation has a major influence on. So, with that being the case, I think this is a market that could be a big mover on Friday, and I'll be watching all of the levels mentioned previously.
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