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The important business confidence survey is the highlight of economic indicators that expect the kiwi. Here’s an outlook for events in New Zealand, and an updated technical analysis for NZD/USD.

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

NZD USD Forecast September October

The kiwi didn’t enjoy the greenback’s weakness in the past week and continued trading around the same range as it did beforehand. Let’s see what will affect it now:

  1. Trade Balance:  Tuesday, 21:45. After 6 months of surplus in the trade balance, New Zealand saw a deficit last month – 186 million, a third straight disappointment. This time, the deficit is expected to squeeze to 74 million.
  2. Building Consents: Wednesday, 21:45. This important gauge of the economy used to be very volatile, with strong jumps up and down. In the past two months, it has been relatively stable, with 3.5% and 3.1% rises. Another small rise is expected this time, showing that the housing sector is moving forward.
  3. NBNZ Business Confidence: Thursday, 2:00. This wide official survey of 1500 businesses scored around 40 points for several months. This change in the past two months with significant drops. The score of 16.7 points last month is still in the positive zone, meaning optimism. A drop to a negative number will hurt the kiwi now.

Let’s review the events. All times are GMT.

NZD/USD Technical Analysis

The kiwi traded between 0.7250 and 0.7350 throughout most of the week. A break above 0.74 (mentioned last week) most very short lived, and the pair closed at 0.7330.

Above 0.7350, the next line of resistance is 0.74, which capped the pair in July and also last week. The next resistance line is close: 0.7440 capped the pair at the beginning of the year quite stubbornly, and serves as strong resistance.

The next resistance line is 0.7523, the swing high back in November. It’s followed by 0.7634, another swing high back in October. These lines are still far.

Looking down below 0.7250, the next support line is at 0.7190, a line that worked as resistance in August. Lower, 0.7150 capped the pair in August and is now support as well.

Lower, 0.7095 is a minor line of support on the way down. It’s followed by the round number of 0.70 which worked in both directions many times. The last support line for now is 0.69, which capped the pair when it was trading lower.

I am neutral on NZD/USD.

The weak fundamentals of New Zealand are offset by the general greenback sell off. This trend is likely to continue in the upcoming week, with more range trading expected.

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