Talking Points:
- NZD/USD Outlook Hinges on RBNZ; Forward-Guidance in Focus.
- Gold (XAUUSD)$1,155 Support at Risk as Bearish RSI Momentum Gathers Pace.
- USDOLLAR Approaching Channel Resistance Ahead of U.S. Retail Sales.
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Chart - Created Using FXCM Marketscope 2.0
- Even though the Reserve Bank of New Zealand (RBNZ) is widely expected to keep the cash rate at 3.50%, NZD/USD may face fresh 2015 lows should the central bank further delay its normalization cycle and implement a dovish twist to the forward-guidance for monetary policy.
- As the Relative Strength Index (RSI) retains the bearish momentum, a break of the February low (0.7175) would expose 0.7140-50 (78.6% expansion).
- Despite the recent weakness in NZD/USD, the DailyFX Speculative Sentiment Index (SSI) shows retail crowd has flipped net-long ahead of RBNZ, with the ratio currently standing at +1.06.
XAU/USD
Chart - Created Using FXCM Marketscope 2.0
- String of lower-highs in Gold (XAU/USD) favors the approach to ‘sell-bounces’ especially as the RSI retains the bearish momentum and pushes deeper into oversold territory.
- Still appears as though gold is being treated more as a commodity rather than a currency as it largely moves in-line with silver (XAG/USD).
- Break of the $1,155 (61.8% retracement) support zone would bring up $1,136 (100% expansion) next on the radar.
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USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 12076.18 | 12084.41 | 12031.1 | 0.28 | 104.32% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar continues to clear near-term targets as the bullish RSI momentum gathers pace; will continue to look for further strength as the oscillator pushes deeper into oversold territory.
- Despite expectations of seeing a 0.3% rebound in U.S. Retail Sales, may see private-sector continue to disappoint as wage growth remains subdued.
- Looking for a close above 12,073 (100% expansion) to favor a further advance; will watch the 12,100 handle for psychological resistance.
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| Release | GMT | Expected | Actual |
|---|---|---|---|
| MBA Mortgage Applications (MAR 6) | 11:00 | -- | -1.3% |
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--- Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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