NZD/USD Price Analysis: Bulls sit tight in anticipation of an opportunity at a discount
- NZD/USD is under pressure following the hawkishness from Fed's Powell.
- NZD/USD bulls await an opportunity to correct into shorts.
NZD is lower versus most key crosses on Wednesday as the high betas take a beating due to the Federal Reserve's chair Jerome Powell saying that the US central bank will stay the course until the job is done. However, Fed's Powell added that the ultimate level of interest rates is likely to be higher than previously anticipated. Federal Reserve's chairman Jerome Powell also said that the Fed is prepared to increase the pace of rate hikes if data indicates it is warranted:
"The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes."
NZD/USD H4 charts
NZD/USD could see another burst to the downside given the momentum in the move with Asia and London yet to come online since the fed's chairman's announcements. However, a correction would be expected at some stage. Pulling the Fibonacci scale up against the current bearish impulse and measuring it from near 0.61 the figure, a retracement towards the 0.6140s, /50s and /70s aligns with the 38.2%, 50%, and 61.8% ratios.
NZD/USD daily chart
On the other hand, the daily inverse head and shoulders pattern still points to a move higher while above 0.6050 with 0.6270 a resistance that guards 0.6390/0.6400.