NZD/USD Trading the New Zealand Business Confidence

NZD/USD Trading the New Zealand Business Confidence

The New Zealand Business  Confidence  index  surveys a wide range of businesses to determine  confidence in  the business sector. A reading  which  is  higher than the market  forecast is bullish for the New Zealand dollar.

Here are the details and 5 possible outcomes for NZD/USD.

Published on Thursday at  1:00 GMT.

Indicator Background

The Business Confidence index measures businesses in a wide range sectors, such as manufacturing, retail and services. These readings can have a significant impact on the direction of NZD/USD.

The  index rose nicely in July, climbing to 15.1 points.  Given some recent  positive  economic data, the markets are hopeful of another solid release this month.

Sentiment and Levels

Although we are seeing  some improvement   in Europe, the weaker  Chinese data and a potential disappointment from Bernanke in Jackson Hole towards the end of the week could hurt the kiwi. So, the overall sentiment is  bearish on NZD/USD towards this release.

Technical levels from top to bottom: 0.8260, 0.8220, 0.8125, 0.80, 0.79 and 0.7840.


5 Scenarios

  1. Within expectations:  12.0 to 18.0: In this scenario, NZD/USD could show some slight fluctuation, but it is likely to remain within range,  without breaking any levels.
  2. Above expectations:  18.1 to 21.0: In this scenario, the pair could  push the pair  above one  resistance level.
  3. Well above expectations: Above 21.0: A sharp rise in the index could propel  NZD/USD upwards, and two or more resistance  lines could be broken.
  4. Below expectations:  8.0 to 11.9: A lower than expected reading could pull the pair downwards, with one support level at risk.
  5. Well below expectations: Below 8.0: A very  poor reading will hurt confidence in the kiwi, and NZD/USD could break two  or more support levels.

For more on the kiwi, see the  NZD/USD forecast.

Kenny Fisher

Kenny Fisher

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.