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NZD/USD Forecast Aug. 29 – Sep. 2

The  New Zealand dollar  tried reaching new highs and had a struggle, moving just a bit higher. Is this break real? 3 events are on the agenda this week. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

New Zealand saw a trade balance deficit of 433 million, worse than expected. This weighed on the kiwi dollar. In the US, new home sales beat expectations. The mixed messages in Jackson Hole  caused a wobble, but the kiwi managed to push through and reach higher ground.

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NZD/USD  daily graph  with support and resistance lines on it. Click to enlarge:

NZDUSD September 2016 technical analysis chart

  1. Building Consents: Monday, 22:45. This gauge of the housing sector has been volatile of late. A jump of 1.6.3% last time. A drop could be seen now.
  2. ANZ Business Confidence: Wednesday, 1:00. The indicator dropped to 16 points in July, after a few months of rises. Will it continue dropping now?
  3. Overseas Trade Index: Wednesday, 22:45, The indicator,  also known as Terms of Trade, jumped 4.4%  in Q1. In Q2, we could see a slide. The RBNZ watches this number closely.

NZD/USD  Technical  Analysis

Kiwi/dollar made an attempt to rise above resistance at 0.7330 mentioned last week  but fell back down.

Technical lines, from top to bottom:

The round number of 0.74 served as resistance and support back in 2015. 0.7330 is the high of 2016 so far.

0.7290 was the pre-Brexit peak and serves as high resistance. The next line is 0.7240 which capped the pair in July 2016.

0.7160 worked as  support when the kiwi was trading on the much higher ground in 2014.  0.7050 was the peak in  April 2015.

The round level of 0.70 is still important because of its roundness but it isn’t really strong.  The low of 0.6940 allowed for a temporary bounce.

The round 0.69 level has  switched positions to resistance. 0.6840 capped the pair during May 2016 and tops the range. 0.6720 is the low seen in May 2016 more than once providing the lower bound.

The  round level of 0.67 that works nicely as support.  Another line worth noting is 0.6640, which capped the pair in November.

I am neutral on  NZD/USD

While there are reasons to like the New Zealand economy, the pair struggles to rise and could remain balanced once again.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.