The New Zealand dollar enjoyed a second week of gains and so far has a positive 2014. Can the pair continue sneaking higher? The NZIER business confidence is the main event of the week. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.
New Zealand building consent jumped by 11.1% November, a huge rise even in comparison to the volatile index. The last stretch of rises came thanks to the weak Non-Farm Payrolls report in the US. With only 74K jobs in December, the pace of QE tapering could slow down.
[do action=”autoupdate” tag=”NZDUSDUpdate”/]NZD/USD daily chart with support and resistance lines on it. Click to enlarge:
- NZIER Business Confidence: Monday, 21:00. This quarterly gauge of business confidence has been positive in the past 6 quarters, reaching a high of 38 points in Q3 2013. For the last quarter, the 2500 strong survey is likely to show another small rise.
- FPI: Tuesday, 21:45. As an exporter of food, the Food Price Index has an impact on the economy and the currency. After a drop of 0.2% in November, a small rise is likely for December.
NZD/USD Technical Analysis
NZD/$ began the week with an upwards move above 0.83 that wasn’t sustained. It then slid and bounced at the 0.82 line, mentioned last week. From there it enjoyed a big bounce, rising to struggle with the 0.8290 line once again.
Technical lines, from top to bottom:
0.8544 was the peak the pair rose to back in October and it serves as a strong line in the distance. 0.8435 was the peak in September – a peak that triggered a big downfall. After it was broken again, the line switched to support. It is a clear separator.
The round number of 0.84 is another line of resistance after capping the pair in September and in November. 0.8335 capped a move higher in December and also had a role in the past. The pair fell short of this line in January 2014.
Below, 0.8290 capped the pair several times during December and now works as a key line to the upside. 0.82, worked as support several times: in September, October and also in December. It is somewhat weaker now.
Close by, 0.8150 capped the pair in August and worked as support in March. The round number of 0.81 worked as resistance in July.
Lower, 0.8135 provided support for the pair in January 2014. Below 0.80, we find another round number: 0.79. This level was a pivotal line several times in the past.
I am bullish on NZD/USD
The kiwi dollar continued to present its strength and resilience, not falling below support. The strength of the local economy certainly plays a key role. Even without recent US weakness, the pair is set for a good year.
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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