NZD news - page 13
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NZD/USD Downside Momentum Slows On Approach To Support
NZD/USD declined for a fifth consecutive session on Tuesday but a late day recovery has created some potential for a retest of a critical support level that was breached late last week.
The currency pair has made a series of bearish technical breaks as of late that suggests that a turn in trend after a bullish run most of the year. The most recent break was below support at 0.6991 on Friday. With the level carrying close proximity to the psychological 0.7000 handle, it is seen as a critical level for the pair as it had previously held the pair higher since mid-June ahead of Friday’s break.
A recovery in the North American session today has opened up the potential for a bullish hammer print on the daily chart, as the pair is on track to wipe out a bulk of today’s losses. The candlestick pattern could signal a recovery and a likely area to find sellers would be at the important 0.6991 broken support level.
The recovery in the pair comes despite disappointing Global Dairy Trade (GDT) figures as the latest auction prices fell 0.5% to record the first decline in four readings.
Next on the economic calendar will be New Zealand trade balance figures and visitor arrivals at 16:45 EST. Out of the United States, existing home sales and crude oil inventories will be released on Wednesday.
The US Dollar index (DXY) continued within its uptrend to make a marginal high above last week’s peak. A high of 103.65 was posted at the North American open and the subsequent decline show the index reaching the 38.2% Fibonacci retracement as measured from this week’s lows.
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New Zealand - Credit card spending for November -4.2% m/m (prior +2.8%)
And, for the y/y its up 4.1%, prior +10.2%
NZ Q3 GDP surge - economist responses
New Zealand Current Account Remains in Deficit in the Third Quarter
New Zealand’s current account balance remained in a deficit in the third quarter, official data showed on Thursday.
The deficit was NZD $4.89 billion in the July to September period, compared to $945 million in the second quarter, Statistics New Zealand said in a report. The annual deficit stood at $7.5 billion.
New Zealand has posted a current account deficit in five of the last six quarters.
New Zealand’s trade deficit narrowed at the start of the fourth quarter, signaling improving global demand for dairy products. Wellington’s trade deficit shrank to $846 million in October from $1.4 billion the previous month. Exports rose 2.2%, led by a 13% rise in the value of dairy product sales. Meanwhile, October imports advanced 0.6% to $4.7 billion.
In a separate report on Thursday, the New Zealand government said gross domestic product (GDP) expanded 1.1% in the third quarter, following a 0.7% increase in the second quarter. Compared to a year earlier, the economy grew 3.4%, official data showed.
Earlier this week, Wellington reported a slightly smaller trade deficit for November, as exports and imports declined. New Zealand’s annualized trade deficit stood at NZD$3.18 billion in November, official data showed.
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NZD/USD Ends Six-Day Losing Streak
Momentum in the Fed-inspired NZD/USD decline has been slowing this week and a marginal gain on Thursday has snapped a six-day losing streak. A range has been playing out for most of Thursday, despite some volatile fluctuations in other major pairs on the back of heavy risk events.
NZD/USD has lost 4% since last Wednesday’s Fed meeting and there have been several indications that the pair has turned lower in the predominant downtrend seen on the weekly and monthly charts. From the high posted in early September, the pair trades lower by nearly 8% or 585 points.
The next major downside target for the pair falls at 0.6867 referencing prior resistance from the fourth quarter of 2015. The level had triggered two turns lower in the quarter, each resulting in notable losses. NZD/USD has reached a low of 0.6882 this week, and downside momentum has subsided as compared to the decline last week. On a weekly basis, there has been little follow-through thus far following last week’s bearish engulfing candle that served to erase a three-week recovery.
Economic data has had little impact on the currency pair as a rally failed to materialize despite better than expected quarterly GDP in New Zealand. The figure rose 1.1% against an expected rise of 0.8%. Out of the United States today, quarterly GDP was revised to 3.5% from 3.2% to beat the analyst consensus for a rise of 3.3%. Durable goods orders declined 4.6% versus the expected drop of 4.7% and the core PCE price index ticked down to 1.6% from the prior 1.7% and analyst expectations for the same reading today.
The US Dollar index (DXY) has fallen into a range over the past five sessions as resistance at 103.54 has triggered a pause in the rally. DXY dipped down to 102.59 following the US data release today but has recovered back into positive territory, trading relatively unchanged on the day.
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NZD/USD Forecast December 26, 2016
The NZD/USD pair fell slightly during the day on Friday, as we continue to grind towards the 0.68 level. This is a market that continues to show quite a bit of negative pressure, but currently I feel that we could get a bit of a bounce. Any short-term bounce should be an opportunity to pick up the value that presents itself in the US dollar. The 0.68 level below will be supported based on longer-term charts, so now I feel that we continue to see sellers come back to this market repeatedly.
NZD/USD Weekly Forecast December 26-30
NZD/USD continued to decline in the past week after a technical break below a notable horizontal level in the week prior. The Kiwi Dollar was stronger than its commodity counterparts in the past week, but the decline in NZD/USD has been steady while retracements have been quite shallow. The pair posted a small gain on Thursday to snap a six-day losing streak but continued lower on Friday to end the week at notable support.
The break below horizontal support at 0.6991 kept bearish momentum intact as the level had previously held the pair higher from mid-June. In the early week, an attempt to retest the broken support failed ahead of the level and a continuation was seen lower. Downside momentum was seen subsiding somewhat this week, however, the pair has posted seven daily losses in the last eight sessions and the single upside day reflected a marginal gain.
The pair ended the week at a horizontal support level residing at 0.6867. The level had held the pair lower in the fourth quarter of 2015 when two attempts at the level resulted in notable declines. The current area offers the potential for a bounce in the upcoming week.
While the upcoming week will be relatively light in terms of high impacting economic data, there were several risk events pertaining to the pair in the past week. Out of New Zealand, the latest Global Dairy Prices declined 0.5% to end a streak of gains over the past four readings. The quarterly GDP was reported to rise 1.1% in the third quarter to beat the expected rise of 0.8%. Out of the United States, durable goods orders declined 4.6%, third quarter GDP came ahead of expectations with a rise of 3.5%, and the PCE price index fell short of the analyst consensus, ticking down to 1.6% on an annual basis.
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NZD/USD Consolidates Near Support
After testing a notable support level on Friday, NZD/USD has fallen into a range. The pair had gained on Monday, but upside momentum was short-lived and a pullback shows little signs of buying.
Volatility has remained subdued in the currency markets following the bank holiday on Monday. Trading conditions will likely remain thin for the remainder of the week.
Support in NZD/USD at 0.6867 reflects prior resistance from the fourth quarter of 2015. The level had elicited two declines within a recovery during the quarter with both drops extending over 400 points.
Commodity currencies are seen testing important levels on Tuesday. USD/CAD is faced with resistance from a 50% Fibonacci level measured from 2016 highs to lows. The level had held the pair lower in mid-November, resulting in a four-week decline. AUD/USD is testing a support level that had held the pair higher in May, resulting in a rally until a recent turn materialized on the back of the US elections.
The US Dollar index (DXY) has been trading sideways over the past six sessions. The index has turned lower from resistance at 103.54 on two occasions while support at 102.91 has been holding the downside on a daily basis.
US consumer confidence as reported by the Conference Board printed at 113.7 for December, beating the analyst consensus of 108.9 and against a revised reading of 109.4 for November.
Among the Kiwi cross rates, NZD/CHF turned higher on Monday to post a bullish engulfing candle, snapping a prior eight-day losing streak. There has been little follow through today and a daily doji print appears likely. AUD/NZD has turned higher to snap a four-day losing streak. The pair has been rangebound through December.
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NZD/USD Recovers Despite a Stronger Dollar
After consolidating at important support in the early week, NZD/USD has recovered higher. The pair fell under some pressure in early European trading as there was demand for the Greenback, but a turn higher following the North American open has erased a bulk of the early day losses and has taken the pair back into positive territory for the day.
The Kiwi Dollar has gained against all of its major counterparts for the day and the week thus far to lead the gainer’s list. Gains in NZD/USD today have come despite an advance in the US Dollar index (DXY).
NZD/USD Ranges On The First Trading Day Of 2017
NZD/USD remains relatively unchanged shortly ahead of the North American close, despite a broad-based recovery in the Greenback. The pair posted small gains in early European trading but turned lower in the North American session to give back a bulk of the day’s gains.
Among the majors, the Kiwi Dollar has given up the least losses against the Greenback. Commodity currencies are generally seen stronger on Monday as the Loonie shows a small gain against the Dollar. The Aussie has been lagging and shows a loss of 0.39% against the Greenback.
The smaller time frame charts for NZD/USD indicate that a correction is taking place as the pair fell through a rising channel that encompassed late week price action from the last trading week of 2016. The pair dropped below the channel on Friday and today’s rally stopped short on a retest of the channel.
The broader outlook for the currency pair shows that a recovery is taking place from notable support. NZD/USD bounced from support at 0.6867 last week. The significance of the level dates back to the last quarter of 2015, where two attempts at the level resulted in declines that exceeded 400 points on each occasion.
Friday’s turn lower had served to print a bearish engulfing candle on the daily chart, signaling the potential of a continuation lower in the predominant downtrend. With little follow through to the downside on Monday, the bearish implications of the candlestick pattern have somewhat been negated. A push above Friday’s high would signal a continuation of the recovery.
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