NZDUSD pair jumped to a six week high on Wednesday, following a solid jobs report from New Zealand that supported the case for another significant interest rate hike this month. RBNZ members acknowledged that the labor markets remained tight and that demand needed to be cooled, though they flagged downside risks to the global economy. Markets are now betting that the RBNZ will raise interest rates by a larger increment of 75 basis points in November after delivering a 50 bp increase last month. Pair may experience elevated volatility in the evening as the Fed is widely expected to raise the target range for the federal funds rate by 75 bps to 3.75%-4%. However traders will look for any hints whether the central bank is willing to reduce the size of its rate hikes starting as soon as December. On the one hand recent economic data indicate that the US economy remains resilient despite rate hikes, however some signs of a slowdown start to emerge, especially in the housing market, while inflation remains elevated. From technical point of view, NZDUSD pair bounced off major support at 0.5540 in the mid-October and is currently testing key resistance around 0.5910 which is marked with upper limit of the 1:1 structure and 78.6% Fibonacci retracement of the upward wave launched in March 2020. Should break higher occur, upward move may accelerate towards local resistance at 0.6065, which is marked with previous price reactions.
NZDUSD, D1 interval. Source: xStation5
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