The New Zealand dollar was trading relatively steadily and looking OK for another week. We have 3 figures coming up this week. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.
The better market mood continued and this helped the kiwi despite a losing streak: a fall in milk prices, lower inflation expectations, weak retail sales and a comment by PM John Key. In the US, things are looking better but this is actually good for risk, supporting the kiwi dollar.
[do action=”autoupdate” tag=”NZDUSDUpdate”/]NZD/USD daily graph with support and resistance lines on it. Click to enlarge:
- Credit Card Spending: Monday, 2:00. With retail sales published only once a quarter, this measure of spending completes the gap. A big jump ot 7.4% y/y was seen in December. Things might be slower now.
- Visitor Arrivals: Wednesday, 21:45.Tourism also plays an important role in the economy. The number of arrivals dropped by 1.3% in December and could bounce now.
- Trade Balance: Thursday, 21:45. New Zealand’s trade deficit shrank to only 53 million in December, much lower than in previous months and certainly good news. A bigger deficit is expected: 0.6550.
NZD/USD Technical Analysis
Kiwi/dollar continued trading in the same 0.6580 to 0.67 range mentioned last week.
Technical lines, from top to bottom:
We begin from lower ground this time. The round level of 0.70 is already in sight. The low of 0.6940 allowed for a temporary bounce.
The round 0.69 level has switched positions to resistance. 0.6860 was a low point as the pair dropped in June 2015.
It is followed by 0.6790 that capped the pair in recent months. The round level of 0.67 that works nicely as support. Another line worth noting is 0.6640, which capped the pair in November.
The post crisis low of 0.6560 is still of importance. Below, the round 0.65 level is of high importance now, serving as support.
Below, we find 0.6415, which cushioned the pair in January, as support. 0.6350 provided support in January 2016.
I am neutral on NZD/USD
Things are smoothing down and it doesn’t look too optimistic any more. The positive market mood is only a temporary aid and it could be enough only for a balancing act.
Our latest podcast is titled Oil’n’gold merry go round