The kiwi awaits important events this week, with the rate statement as the “best for last”. Here’s an outlook for this week’s events in New Zealand, and a technical analysis for NZD/USD.
- Trade Balance: New Zealand usually enjoys a surplus in its export oriented economy, yet the size of this surplus isn’t stable. In the last months, this surplus was higher than expected each time. After rising to 858 million, it’s now predicted to squeeze back to 214 million. This is the first event of the week, published on Monday at 22:45 GMT.
- Building Consents: Published on Tuesday at 22:45 GMT, this figure reflects the future construction works, something that affects the whole economy. This building permits release is important despite being very volatile. Last time, it recorded a rise of 3.5%, and also figures from previous months were revised upwards. This time, economists expected a drop in building consents, a drop of 4.8%.
- NBNZ Business Confidence: Published on Wednesday at 3:00 GMT, quite close to the Building Consents release. In the last two months, kiwi businesses have shown optimism according to this survey. The index was positive for two months in a row after many badly negative numbers. Last month it scored 5.5 points. Will it remain negative?
- Rate decision: The RBNZ meets to decide upon a new interest rate. Together with Australia, New Zealand holds an interest rate that isn’t close to zero. The Official Cash Rate is at 2.5%, and isn’t expected to change this time. The accompanying RBNZ Rate Statement will draw attention. Will they express optimism like the BOC? Are they taking the better figures seriously, or are they dismissing them? The specific wording of the statement is critical for NZD/USD.
NZD/USD Technical Analysis
The kiwi passed the 0.65 line, but we can’t say that this was a “break”. NZD/USD is a pair that moves quite slowly. It began the forex trading week by rising up to 0.6615 before settling back, currently at 0.6544.
Looking up, 0.6780 serves as a resistance line, after holding as a strong support line for two periods in 2007. Higher up, 0.6950 is another resistance line. It was the peak during September last year.
Down from here are territories that were recently visited: 0.65 is a support line that was taken not long ago. Below, 0.6120 served as a resistance line a few months ago, and now offers support.
All in all, this pair’s direction is more up than down. Still, NZD/USD takes its time…