The New Zealand dollar continued suffering due to a variety of reasons. Retail sales stand out this week. Will the kiwi fall even further? Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.
Following the rate cut by the RBNZ, new blows came from the yet another fall in dairy prices as well as a weaker than predicted gain in employment: only 0.3%. At least the unemployment rate remained unchanged at 5.9%. In the US, most data points came out better than expected.
[do action=”autoupdate” tag=”NZDUSDUpdate”/]NZD/USD daily graph with support and resistance lines on it. Click to enlarge:
- Business NZ Manufacturing Index: Wednesday, 22:30. With all the gloom about the direction of the New Zealand economy, this PMI-like figure remained quite upbeat, hitting 55.2 points in June. A small slide is on the cards now.
- FPI: Wednesday, 22:45. The Food Price Index plays second fiddle to the GDT number, but is still of importance. After a rise of 0.5%, we could see a slide now.
- Retail Sales: Thursday, 22:45. This figure, like many others in New Zealand, is published only on a quarterly basis, making each publication quite important. Q1 was quite strong with +2.7% in the headline number and 2.9% in core sales. Another rise is on the cards, but it will likely be weaker.
NZD/USD Technical Analysis
Kiwi/dollar had a nice start to the week but eventually slid and even dipped below 0.65.
Live chart of NZD/USD:
[do action=”tradingviews” pair=”NZDUSD” interval=”60″/]Technical lines, from top to bottom:
We start from a lower point this time. 0.7075 provided some support in May and is a weak level now. And of course, the very round level of 0.70 looms large and gave a fight before the pair continued south in June.
Further, the low of 0.6940 allowed for a temporary bounce. The round 0.69 level is switched positions to resistance.
0.6860 was a low point as the pair dropped in June 2015. It is followed by the 0.68 level that worked as resistance when the pair was climbing a few years back.
Close by, the July high of 0.6770 serves as resistance. Quite close by, the high of 0.6740 seen in July is another cap.
It is followed by the round level of 0.67 that is a pivotal line in the range. The now previous July low of 0.6650 was a multi-year low and the break below it was not confirmed.
0.6620 is the new 2015 low and for now serves as minor support. The post crisis low of 0.6560 is still of high importance.
Below, the round 0.65 level is of high importance now. The last line is 0.64886, which was the low both in July and in August – a double bottom.
There isn’t much on the way down. 0.6160 can be noted as a post crisis attempt to recover.
I remain bearish on NZD/USD
The kiwi is likely to find more reasons to slide with weaker numbers from retail sales and other figures. In the US, there is a growing notion about a September hike, and this continues supporting the greenback.
In our latest podcast, we ask: Will they or won’t they? We talk about the Fed and also falling oil and silver.
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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