This week’s isn’t too busy with indicators, so the technicals will play a significant role in the kiwi’s trading. Here’s an outlook for the events in New Zealand and an updated technical analysis for NZD/USD.
NZD/USD daily chart with support and resistance lines marked. Click to enlarge:
Retail sales disappointed once again in New Zealand, hinting that the rates could rise more slowly than expected. Nevertheless, the kiwi is enjoying risk aversive trading and it’s rising. Let’s start:
- Visitor Arrivals: Published on Wednesday at 22:45 GMT. New Zealand’s economy depends on tourism, making this figure very important. After a disappointing drop of 1.8% two months ago, the number of visitors rose by 1% last month. A drop is expected this time, due to seasonal reasons.
- Credit Card Spending: Published on Wednesday at 3:00 GMT. Consumer spending is reflected quite well in credit card spending. The RBNZ has shown 7 months of growth in spending, with a nice rise of 3.4% last month. A smaller rise will probably be seen this time.
NZD/USD Technical Analysis
The kiwi began the week with some range trading, and then made a breakout and rose above 0.7160. An attempt to reach the strong resistance line of 0.7325 failed, and the pair fell sharply towards the end of the week to close at 0.7102.
Note that some lines have changed since last week’s outlook. NZD/USD now trades between 0.7160 and the round number of 0.70, which provides strong support.
Looking down, 0.6910 served as a strong line of resistance in May and also last August and now works as support. Below, 0.68 provided support a few weeks ago and also in February and works as a strong line of support.
There are more lines below, but the most significant one worth mentioning is the year-to-date low of 0.6560.
Looking up above 0.7160, the next line is 0.7325, that proved itself in the past week. Higher, 0.7440 worked as a stubborn line of resistance at the beginning of the year, and will cap the kiwi if it breaks above 0.7325.
Even higher, 0.7520 was a peak in November, and it’s followed by 0.7630, which was the highest level since the outbreak of the financial crisis.
I remain bullish on NZD/USD.
Despite worsening global conditions, the economy in New Zealand is doing well, and the rising interest rates attract investors, creating a potential for further rises.
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/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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