The New Zealand dollar as most data remained positive for the local economy. The bi-weekly dairy event is the main event for this week. Can AUD/NZD hit parity? Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.
While inflation expectations fell below 2%, trade balance returned to a surplus and business confidence continued advancing. Here are 5 reasons to invest in NZD. The positives beat the negatives in New Zealand. In the US, solid inflation and some bullish Fed comments kept the greenback bid.
[do action=”autoupdate” tag=”NZDUSDUpdate”/]NZD/USD daily chart with support and resistance lines on it. Click to enlarge:
- Overseas Trade Index: Sunday, 21:45. Before trading really begins, we will get a view on New Zealand’s terms of trade. These have worsened in Q3, falling by 4.4%, A bounce back is expected for Q4 in this relatively volatile indicator.
- ANZ Commodity Prices: Tuesday, 00:00. Commodity prices have an impact on NZD as the nation exports commodities. However, this indicator is recently overshadowed by the milk auction.
- GDT Price Index: Tuesday (usually in the US session). This bi-weekly release of changes in dairy products has a big impact on the kiwi. In the past 5 releases, prices have risen, with 10.1% and 9.4% jumps in the past two publications. Will we see a slide now?
* All times are GMT.
NZD/USD Technical Analysis
Kiwi/dollar began the week with a dip below 0.7450, but recovered swiftly. The pair hit resistance at 0.7615 (mentioned last week) before settling in range under 0.7584.
Live chart of NZD/USD:
[do action=”tradingviews” pair=”NZDUSD” interval=”60″/]Technical lines, from top to bottom:
0.7715 was stronger support after serving holding the pair in December. 0.7680 worked as support in December and that is where the pair stopped in early January 2015.
Below this point, we are back to levels last seen in 2012: 0.7615 now works as resistance after providing support during January 2015. It is followed closely by 0.7585 which capped the pair on an initial recovery attempt.
The very round number of 0.75 capped the pair just before the big fall and serves as strong resistance. It is followed by 0.7450 that had a role in the past.
The next line is 0.7370, which was a low point in 2011. It is followed by 0.7325, which capped the pair in the middle of 2010.
The recent 2015 low of 0.7235 is now the next support line. It is followed by 0.7180 that served as resistance back in 2010.
The swing low of 0.71 in 2011 provides further support before the very round number of 0.70.
Below this round number, we have 0.6950 and 0.6810.
I turn from neutral to bullish on NZD/USD
The kiwi stood its ground quite well despite a comeback of sorts for the greenback. And, now, we can see it rising back up, in line with faster growth.
In this week’s podcast, we cover Yellen & the hike, AUD & CAD rate previews, Jobless claims vs. USD & Greek back burner
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Further reading:
- For a broad view of all the week’s major events worldwide, read the USD outlook.
- For EUR/USD, check out the Euro to Dollar forecast.
- For the Japanese yen, read the USD/JPY forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the Australian dollar (Aussie), check out the AUD to USD forecast.
- For USD/CAD (loonie), check out the Canadian dollar forecast.
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