A key takeaway from FOMC minutes from October 31-November 1 meeting is the consensus on proceeding with caution, as indicated by the unanimous agreement that “the Committee was in a position to proceed carefully.”
The minutes also emphasized Fed’s readiness to implement further tightening measures if the progress toward its inflation target is deemed insufficient. This stance is aligned with Fed’s ongoing commitment to combatting inflation, as reflected in the sentiment that “further tightening of monetary policy would be appropriate if incoming information indicated that progress toward the Committee’s inflation objective was insufficient.”
The committee members were also unanimous in their view that restrictive policy stance should be maintained until inflation shows a sustainable decline towards Fed’s target. This highlights Fed’s focus on ensuring that inflationary pressures are adequately managed before considering any policy easing.
However, a notable shift in the committee’s outlook was observed in the latest minutes. The previous stance, which suggested that “one more increase in the target federal funds rate at a future meeting would likely be appropriate,” was conspicuously absent in the latest document. This omission may signal a slight softening in the FOMC’s hawkish stance, indicating a potential pivot in future policy decisions.
NZD/USD heads back to 0.5858 short term bottom
NZD/USD experienced a sharp decline overnight, attributed largely to a vigorous rebound seen in Dollar. Bearish momentum for the pair continued into Asian session, further weighed down by disappointing manufacturing data from New Zealand.
From a technical standpoint, price actions stemming from 0.5858 short term bottom appear to have a corrective structure. The pronounced drop seen today suggests the possibility that this corrective phase might have concluded at 0.6054, just shy of 38.2% retracement of 0.6410 to 0.5858 at 0.6069.
Near term focus is now turned to 0.5858 low. Decisive break there will confirm resumption of whole down trend from 0.6537. Next target is 61.8% projection of 0.6410 to 0.5858 from 0.6054 at 0.5713.
In the event of recovery, 0.6054 resistance remains pivotal. As it stands, unless this level is surpassed, any recovery attempts are likely to be short-lived, keeping the bearish bias intact.