NZD/USD Outlook – May 31 – June 4

The kiwi managed to end a volatile week higher, moving mostly on  higher inflation expectations and an improved surplus in its trade balance.  The kiwi will move mostly on technicals in the upcoming week. Here’s an outlook for the events in New Zealand and an updated technical analysis for NZD/USD.

NZD/USD graph with support and resistance lines marked. Click to enlarge:

1. NBNZ Business Confidence: Published on Monday at 3:00 GMT. This important indicator for the central bank showed growing optimism last month. The big rise from 42.5 to 49.5 points helped the kiwi, although it didn’t break new records. The 1500 businesses surveyed here are expected to be less optimistic this time.
2. ANZ Commodity Prices: Published on Wednesday at 3:00 GMT. New Zealand’s commodities are a big part of the economy, making this indicator important. Last month saw a strong rise in prices – 4.9%. The forecast is for a small rise.

NZD/USD Technical Analysis

After another volatile week, which kiwi traders aren’t usually used to, the pair closed at 0.6780, between the support line of 0.6680 and the resistance line of 0.68, which was shattered in the past week.

Looking up, the next line of resistance above 0.68 is the round number of 0.70, which worked as a strong support line in the past months. 0.7050 is the next minor line of resistance, also working mostly as a support line.

Higher, 0.72 is a resistance line that mostly had this exact role in the past few months. It’s followed by 0.7320, which is quite far at the moment.

Looking down below 0.6685, 0.66 is the next line of support, being a support and resistance line in August. Minor support is found around 0.64, and the next line in the horizon is 0.62, which worked as support line in July.

I’m neutral on the kiwi.

Similar to the Aussie, it managed to detach itself from the European turmoil. But contrary to the Australia, the fundamentals of New Zealand aren’t strong enough for gains, at least not in such a light-calendared week.

Further reading:

• For a broad view of all the week’s major events worldwide, read the  forex weekly outlook.
• For the Euro/Dollar, look into the  EUR USD Forecast.
• For the British Pound (sterling), read the  GBP/USD forecast.
• For the Australian dollar (Aussie), check out the  AUD/USD forecast.
• For USD/CAD (loonie), check out the  Canadian dollar forecast.

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