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The  New Zealand dollar  managed to stabilize after the storms, but 0.80 still seems unreachable. The price of milk takes center stage now.  Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

Business confidence continues falling according to the  NZIER Business Confidence number, that slid to 19 points. On the other hand, a sell off the US dollar resulting in the concerned FOMC minutes certainly helped NZD/USD..

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

NZDUSD October 13 17 2014 New Zealand dollar USD technical analysis currency trading fundamental outlook

  1. FPI: Sunday, 21:45. As an exporter of food, the Food Price Index makes a difference, even if it is recently overshadowed by the once per fortnight  milk release, only happening this week.
  2. REINZ HPI:  Tuesday or Wednesday. This house price index moved higher in August, by 1.1%, after three months of drops. All in all, prices of homes are not as steaming hot as they were beforehand, but the market is still moving.
  3. GDT Price Index: Wednesday. The Global Dairy Trade, or simply put, the price of milk has a huge impact on the economy of New Zealand. A fall of 7.3% was recorded last time, and it was painful for the kiwi. Some stabilization is needed.
  4. Business NZ Manufacturing Index: Wednesday, 21:30. This  PMI like indicator stood on 56.5 points last month, showing solid growth, above previous levels. This optimism is expected to continue also in September.

* All times are GMT.

NZD/USD  Technical  Analysis

Kiwi/dollar  fell to support at 0.7715 (mentioned last week) but from there, it was uphill. The pair peaked at  0.7975 and then fell back to the middle of the range.

Live chart of NZD/USD:

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Technical lines, from top to bottom:

Further below, the round levels of 0.82 is certainly worth watching. It is followed by the  initial September low of 0.8120.

0.8075 was one of the cycle  lows and now works as resistance.  Even lower, 0.8050 provided support for the pair back in February and is the last line before the very round figure of 0.80.

0.80 is now key resistance on the upside. Just below, the old  resistance line of 0.7975 is coming back to play after capping the pair in October.

0.7930 was a double top in October’s recovery and is important to watch. It is followed by 0.7850.

0.78 is a round number and provided support various times, including recently. Going deeper, 0.7765 worked as support, and is a line to watch on the way down.

0.7715 is stronger support after serving as a cushion for the pair in September 2013. 0.7685 is very strong support and it held the pair back in the summer of 2013.

Below this point, we are back to levels last seen in 2012: 0.7615 is initial support and the critical line is 0.7460.

I remain  neutral  on  NZD/USD

While the strength of the US dollar seems to be waning and the interest rate differential favors the kiwi, the USD is not beaten yet and neither is the RBNZ. All in all, the forces could remain balanced for another week.

More: NZD/USD appears on the list of the 5 most predictable currency pairs.

In our latest podcast, we  discuss the big events for October:

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Further reading: