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Technical Analysis: NZDUSD bears rejected around 0.7000NZDUSD refreshed monthly low, before bouncing off 50-DMA during the four-day downtrend. Not only the short-term moving average but 38.2% Fibonacci retracement of the May-August decline also challenges the pair sellers around the 0.7000 threshold. Should the quote drops below the 0.7000 mark, 23.6% Fibonacci retracement level of 0.6920 and July lows near 0.6880 can entertain the bears before directing them to the yearly low of 0.6804. On the contrary, recovery moves need to get validation from September 08 lows near 0.7075. Following that, 61.8% Fibonacci retracement and monthly top, respectively around 0.7120 and 0.7170, should lure the NZDUSD buyers. In a case where the pair bulls keep the controls beyond 0.7170, the 0.7230 and the May monthly peak surrounding 0.7315 should return to the chart. Overall, the kiwi pair braces for corrective pullback amid a short-term downtrend.
Long
by MTradingGlobal
NZDUSD bears cheer RBNZ status-quo, FOMC minutes eyedAlthough RBNZ Governor Adrian Orr could pull the NZDUSD prices back from a yearly low, not to forget mentioning the two-month-old support line, the New Zealand central bank’s refrain from a widely anticipated rate hike keeps the kiwi pair sellers hopeful. Also favoring the NZDUSD bears is the sustained downside break of 200-SMA and the previous support line from July 20 amid bearish MACD. That said, the quote currently drops towards the 0.6900 threshold before the recently flashed nine-month low of 0.6867. It should be noted that a downward sloping trend line from June 18, near 0.6860, can challenge the pair’s further downside. Meanwhile, August 10 lows near 0.6970 guard the quote’s corrective pullback ahead of 200-SMA and support-turned-resistance line, respectively around 0.6990 and 0.7005. During the NZDUSD upside past 0.7005, the previous week’s top close to 0.7060 and a six-week-old downward sloping resistance line close to 0.7080 will be important to watch. It’s worth noting that the FOMC minutes should reject the tapering tantrum, which is less likely, to recall the NZDUSD bulls.
Short
by MTradingGlobal
NZDUSD confirms rising wedge on strong NZ employment dataWith the firmer Q2 jobs report, the RBNZ is all set to become the first developed nation central bank to announce a rate hike in 2021. The bullish consensus spread like a wildfire among the top-tier banks following the data, fueling the NZDUSD prices beyond a key hurdle from mid-June, which in turn confirmed a bullish formation suggesting a theoretical jump towards revising the May month’s low near 0.7315. During the run-up, tops marked during July and June, respectively near 0.7100 and 0.7240 may offer an intermediate halt. Alternatively, pullback moves below the resistance-turned-support line, around 0.7025, will be challenged by 200-SMA and a one-week-old rising support line, close to 0.6990–85. Should NZD/USD sellers break the 0.6985 level, the pair’s further weakness towards 0.6920 and July’s bottom surrounding 0.6880 can’t be ruled out. However, the support line of the stated wedge, around 0.6860, will challenge the quote’s declines past 0.6880. Overall, optimism concerning the RBNZ’s rate hike backs the NZDUSD bulls.
Long
by MTradingGlobal
New Zealand dollar slide continuesThe New Zealand dollar has recorded losses for a third straight day. In the European session, NZD/USD is trading at 0.7212, down 0.33% on the day. The ANZ Commodity Price Index climbed 1.3% in May, marking an eighth consecutive rise. The index rose to a record level, as commodity prices rose in all major categories. The rise in commodities this year is in sharp contrast to 2020, when the Covid pandemic caused a sharp downturn in the global economy. This was reflected in a sharp fall in commodity prices, as the Commodity Price Index recorded declines throughout most of 2020. As Covid rates fall, major economies have been reopening, and improving economic conditions have led to speculation that central banks may respond by tightening policy. The Bank of Canada recently tapered its QE programme and the Reserve Bank of New Zealand surprised the markets last week when it signalled the potential of a rate hike in the second half of 2022. If the RBNZ continues to send a hawkish message to the markets, we can expect the New Zealand dollar to gain ground. This week's key event is the US nonfarm payroll release for May on Friday (12:30 GMT). The market is projecting a strong release, with a consensus of 664 thousand. If the upcoming release is within expectations, it would indicate a significant acceleration from the April reading of 266 thousand. The April release was a massive miss, as the forecast stood at 966 thousand. Investors can be expected to be cautious ahead of the release. If the nonfarm payroll release is as strong as expected, we could see a breakout in the forex markets on Friday. Investors will also be keeping an eye on wage growth, which could put a damper on the NFP party. Average Hourly Earnings is projected to slow to 0.2% in May, after a sharp gain of 0.7% previously. There is resistance at 0.7777 and 0.7846. On the downside, we have support at 0.7658 and 0.7608
by OANDA
New Zealand dollar soars on RBNZThe New Zealand dollar has recorded sharp gains on Wednesday. In the European session, NZD/USD is trading at 0.7303, up 1.02% on the day. As was widely expected, the Reserve Bank of New Zealand maintained its policy settings and kept the Official Cash Rate (OCR) at 0.25%. The RBNZ also upgraded its economic forecasts for 2o21. This was not a surprise, given the economy's strong recovery. However, the rate statement was more hawkish than the market had expected, in particular the forward guidance as to a potential rate hike. The central bank's OCR projection suggested that we could see a rate hike as early as the fourth quarter of 2022. Ahead of the policy meeting, the well-respected Westpac Group said that they did not expect a rise in rates prior to 2024. The potential of a rate hike occurring much earlier than expected has sent the New Zealand dollar sharply higher. Will the RBNZ be able to deliver on a rate hike late next year? That will depend on the strength of the economy, in particular, the inflation and employment situation. It is a hazardous game to predict rate hikes, as we saw Westpac forced to wipe egg off its face after its forecast for a rate hike was way off the mark. It's been a banner week for the kiwi, which has racked gains of 1.8 per cent. The US dollar continues to stumble and is broadly weaker against the majors. We could still see further movement this week, as the US releases key data. The highlight is US Preliminary GDP for the first quarter, which will be released on Thursday. The initial estimate came in at 6.4%, and the consensus for the second estimate has been upwardly revised to 6.5%. This will be followed on Friday by the Core PCE Price Index, which is the Federal Reserve's preferred inflation gauge. The index is expected to rise to 0.6% in April, up from 0.4%. With higher inflation still a concern, a higher reading than the consensus could boost the US dollar. NZD/USD is testing resistance at 0.7239, which has held since February 26. Above, there is resistance at 0.7314. There is support at 0.7120 and 0.7076 .
by OANDA
New Zealand dollar continues to gain groundThe New Zealand dollar continues to head higher this week. In the North American session, NZD/USD is trading at 0.7244, up 0.37% on the day. It has been a strong start to the week for the New Zealand dollar, which is up 0.95%. The US dollar is once again struggling against the major currencies. Inflation surged in April, which led to speculation that the Fed might contemplate scaling back QE. This gave the US dollar a brief boost earlier in May, but the market appears to have accepted the Fed line that higher inflation is transitory and any tightening of policy is a while off. The Federal Reserve continues to send out a consistent, clear message to the market that its ultra-accommodative policy will continue and that will maintain current QE levels. With a tighter policy unlikely in the short term, the US dollar has become less attractive to investors. The Reserve Bank of New Zealand holds its policy meeting on Wednesday. New Zealand data has been strong, but there are concerns of reflation as the economy heats up. The central bank is expected to sound dovish, with no changes forecast in policy. Still, given the strength of the economic recovery, investors will be looking for any hints of potential tapering to QE, which would be bullish for the New Zealand dollar. Westpac expects the RBNZ to upwardly revise its economic forecasts for 2021. It also is projecting that inflation will easily surpass 2 per cent this year, but adds that the RBNZ has anticipated this and will view higher inflation as transitory. We have seen this script with the Federal Reserve, which has dismissed a recent surge in inflation as merely temporary. Finally, Westpac does not expect the central bank to hike rates before 2024. NZD/USD is testing resistance at 0.7239. Above, there is resistance at 0.7314. There is support at 0.7120 and 0.7076 .
by OANDA