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On September 18th, Nick Timiraos, the "Federal Reserve mouthpiece," stated: "When the Federal Reserve cut interest rates on Wednesday, it superficially looked like a routine monetary policy operation. The market reaction was relatively muted, and Chairman Jerome Powell largely avoided the heated disagreements sparked by the decision, despite it occurring against the backdrop of unprecedented political confrontation." The policy shift initiated by Powells rate cut on Wednesday may represent his last effort to demonstrate that an independent US central bank remains capable of guiding the economy in a complex environment, rather than surrendering its independence before officials more aligned with President Trumps priorities gain greater control. Powells term as chairman will end next spring. For the third time in his tenure, Powell attempted an extremely delicate maneuver: cutting interest rates not because a recession is imminent, but to prevent one.Nick Timiraos, the "Federal Reserve mouthpiece": This is the third time under Powells leadership that the Fed has begun cutting interest rates without facing a significant economic downturn. But given the more difficult inflation situation and political factors (the White Houses confrontational nature), the stakes in 2019 and 2024 will be different than they are now.New York Times CEO: Trump is using an "anti-media strategy."The Federal Reserve cut interest rates by 25 basis points as expected. Why did gold prices briefly rise before retracing all gains? Has the actual impact of previous interest rate adjustments truly lived up to expectations? The Futures Focus Timeline provides a summary.Japanese Chief Cabinet Secretary Yoshimasa Hayashi: We are monitoring the impact of the US economic situation on Japan.

Analysis of the NZD/USD Price indicates a continuation of gains towards 0.65

Daniel Rogers

Jan 18, 2023 15:02

 NZD:USD.png

 

The NZD/USD pair is oscillating within a narrow range near 0.6430 in the early Asian session. Despite the market's risk aversion, the New Zealand dollar has traded sideways after reclaiming the monthly high of 0.6437. In reaction to Tom Barkin's hawkish comments about the Richmond Federal Reserve (Fed) Bank, S&P500 futures are exhibiting greater losses, indicating investors' diminishing appetite for risk.

 

Following a V-shaped recovery, the US Dollar Index (DXY) has turned sideways at 102,000 and is expected to extend gains on a risk aversion theme. In addition, higher 10-year US Treasury yields would certainly provide safe-haven investments a new lease of life.

 

After one hour of consolidation, the NZD/USD pair has broken out of the Bullish Pennant chart pattern, indicating that the rising trend will continue. Participants typically initiate long positions during the consolidation period of a chart pattern, preferring to enter an auction once a bullish bias has been established.

 

Adding to the upward filters, the 20-period and 50-period Exponential Moving Averages (EMAs) have resumed their upward trend at 0.6415 and 0.6401, respectively.

 

Meanwhile, the Relative Strength Index (14) continues to struggle to enter the positive zone between 60.00 and 80.00. The occurrence of a similar event will produce bullish momentum.

 

For greater gains, the Kiwi asset must beat Tuesday's high of 0.6439, which will rocket it to December 15's high of 0.6470, then December 13's high of 0.6514.

 

Alternately, a breach below Monday's low of 0.6361 will weaken the New Zealand Dollar and push the Kiwi asset towards January 12's low of 0.6304. A breach below this level will expose the asset to more losses approaching the low of 0.6263 on December 28.

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