New Zealand Gross Domestic Product (GDP) is a key release, released each quarter, which measures production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity. A reading which is better than the market forecast is bullish for the New Zealand dollar.
Here are all the details, and 5 possible outcomes for NZD/USD.
Published on Wednesday at 22:45 GMT.
New Zealand GDP is a key economic indicator, and provides an excellent indication of the health and direction of the New Zealand economy. Traders should pay close attention to the GDP release, as any unexpected reading could affect the direction of NZD/USD.
GDP in Q1 climbed 1.1%, its best performance in over five years. This reading easily beat the market forecast of 0.5%. The markets are expecting a much smaller gain for Q2, with an estimate of 0.3%. Will the indicator again surprise the markets with a strong reading?
Sentiments and levels
The pair failed to close at higher levels despite QE3. Chinese issues remain problematic, and slower pace of growth in China will likely have major repercussions for the New Zealand economy. As well, the central bank in New Zealand is carefully monitoring the strength of the kiwi. We could see some correction at these levels. So, the overall sentiment is bearish on NZD/USD towards this release.
Technical levels, from top to bottom: 84.70, 84, 83.20, 82.60, 82.20, and 81.25.
- Within expectations: 0.0% to 0.6%. In such a scenario, NZD/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.9% to 1.2%: An unexpected higher reading can push the pair above one resistance line.
- Well above expectations: Above 1.2%: An surge in the reading would bolster the kiwi, and the pair could break a second line of resistance as a result.
- Below expectations: -0.4% to -0.1%: A negative GDP figure could push NZD/USD below one support level.
- Well below expectations: Below -0.4%. A very weak reading would hurt the kiwi, and the pair could push below a second level of support.
For more on the kiwi, see the NZD/USD forecast.
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