Business confidence is the highlight of kiwi events in the upcoming week. Here’s an outlook for these events and an updated technical analysis for NZD/USD.
NZD/USD daily chart with support and resistance lines on it. Click to enlarge:
The kiwi enjoyed the Chinese announcement to push forward. Also the better-than-expected GDP was kiwi-positive. Risk aversive trading limited the gains of the kiwi.
- NBNZ Business Confidence: Published on Monday at 3:00 GMT. This monthly survey of 1500 businesses always rocks the kiwi. The indicator edged down last month from 49.5 to 48.2 after the market mayhem. This month will probably see a rise, that will push the kiwi higher.
- Building Consents: Published on Monday at 22:45 GMT. The housing sector enjoyed a leap of 8.5% in building permits last month. This volatile indicator usually falls after such strong leaps. A weak drop will help the currency.
- ANZ Commodity Prices: Published on Friday at 3:00 GMT. Similar to Australia, New Zealand’s economy is dependent on commodity exports. The mild rise of 2.5% last month will probably be followed by a stronger rise this time. Note that the similar release in Australia impacts the kiwi as well.
NZD/USD Technical Analysis
A gap was seen in the NZD/USD chart at the start of the week, with the pair jumping above the 0.7080 resistance line. The pair then attempted to break 0.7160 three times and failed. This is a new resistance line that didn’t appear in last week’s outlook.
Looking above 0.7160, the next line remains 0.72, which is quite close. Higher, the 0.7325 line which capped the pair at the beginning of May provides the next significant resistance line.
Even higher, the 0.7440 line provided strong resistance for a few straight days at the beginning of the year, and provide the last line for now.
Looking down, 0.7080 continues to be of some significance, but less than last week. Much stronger support appears at the round number of 0.70, which supported the pair during the past week.
Lower, 0.6910 is the next support line for the pair, after being an important stepping stone on the way up, and working as resistance in the past. It’s followed by 0.68 which supported the pair in February, 0.6685 which held it in September and by the year-to-date low of 0.6560.
I remain bullish on NZD/USD.
The stronger-than-expected GDP in Q1 and also in Q4 show that New Zealand’s economy is in the right direction.
- For a broad view of all the week’s major events worldwide, read the forex weekly outlook.
- For EUR/USD, check out the Euro/Dollar Forecast.
- For GBP/USD (cable), look into the British Pound forecast.
- For the Australian dollar (Aussie), check out the AUD/USD forecast.
- For USD/CAD (loonie), check out the Canadian dollar forecast.
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