News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • The inside bar pattern occurs regularly within financial markets. Incorporating the inside bar strategy can enhance a trader's market analysis. Find out how you can use it from @WVenketas here: https://t.co/E3EWOYTYNw https://t.co/aK98CEpfOH
  • Point 3 is not talked about enough. The bureaucratic - dare I say, Leviathan - in most universities is resulting in tuition prices skyrocketing without adding clear value to the students. https://t.co/WNZIORrfAk
  • Think #amzn will gap higher on Monday after Black Friday and the giant move to online shopping?
  • The exponential moving average (EMA) is a derivative of the simple moving average (SMA) indicator. Compared to the SMA, the EMA weighs recent price changes more heavily than later changes in price. Learn how to incorporate the EMA into your strategy here: https://t.co/w48c0xJXSX https://t.co/xFmhA7ZHqU
  • Traders in the Euro have a big decision to make this weekend: if EUR/USD hits 1.20, will it continue to advance, consolidate or fall back? Get your $EURUSD market update from @MartinSEssex here:https://t.co/8hAhguZcEA https://t.co/kwtatozp3z
  • The bullish engulfing candle is one of the forex market's most clear-cut price action signals for reversals and continuation. Learn more about this price action trading signal here: https://t.co/Yg6ecRZZNr https://t.co/9SdceNYUEK
  • The bull flag pattern is a great pattern to add to a forex trader's technical arsenal. Explosive moves are often associated with the bull flag. Learn more about the bull flag pattern here: https://t.co/yOEvLjKnct https://t.co/imv2PnapzH
  • Defensive stocks have proven critically important when navigating stock market volatility. Find out what are the most defensive stocks here:https://t.co/TMcbMALtbw https://t.co/mmldxxEtsc
  • Dollar Index has broken major uptrend support and risks accelerated losses into the December open. Get your $USD technical analysis from @MBForex here:https://t.co/Txo8l8S1f1 https://t.co/YLVzP95JH8
  • The MACD is an indicator that uses exponential moving averages (EMA) to determine trend strength along with entry points based on crossovers. Find out how you can use the MACD as a buy/sell signal here: https://t.co/qxnP99uqTQ https://t.co/tGVqSZ2zK3
NZD/USD Implied Volatility at 1-Month High, Major Moves Ahead?

NZD/USD Implied Volatility at 1-Month High, Major Moves Ahead?

2018-03-16 00:45:00
Daniel Dubrovsky, Analyst
Share:

Talking Points:

  • NZD/USD one-week implied volatility is at a one-month high, hinting at elevated price action
  • Next week on Wednesday, the Fed and RBNZ rate decisions are within 2 hours of each other
  • The pair appears to be falling after a bearish reversal pattern was followed with confirmation

Just started trading NZD/USD and want apply next week’s profile into your setup? Check out our beginners’ FX markets guide!

New Zealand Dollar implied volatility levels continues to be elevated when comparing to other majors. Against the US Dollar, the one-week (1W) reading stands at 10.27% which is the highest since February 9th. That was back around the time when US inflation fears triggered a market-wide selloff which hurt the sentiment-sensitive currency. This time around, monetary policy seems to be the culprit in these pricings.

Implied Volatility and Market Range

NZD/USD Implied Volatility at 1-Month High, Major Moves Ahead?

Next week we will get the Fed and RBNZ rate decisions on the same day and within two hours of each other. The risk for the New Zealand Dollar in the former event, which is at 18:00 GMT on Wednesday, is how policymakers’ forward guidance impact sentiment. That is because a rate hike is unanimously priced in for this event, and Chair Jerome Powell has hinted the possibility for a fourth one this year back in February.

Then the RBNZ monetary policy announcement will cross the wires at 20:00 GMT. No rate change is expected and the markets have been slowly moving away from the idea that they could hike once by the end of the year. However, not all have lost hope and there is a chance that they could yet be disappointed. Overnight index swaps are pricing in a 38.7% probability that the central bank will act by its November meeting.

With that in mind, there is a good chance that NZD/USD implied volatility continues climbing as we get closer to this date. But for now, let’s see where the current levels may take the pair.

For other currency volatility-related articles please visit the Binaries page.

NZD/USD Technical Analysis: Dark Cloud Cover, Turning Lower?

On a daily chart, NZD/USD seems to have broken below near-term rising support after the formation of a dark cloud cover. This bearish reversal pattern does require confirmation, and that appears to have been fulfilled after the 14.6% minor Fibonacci retracement was pierced through at 0.7282.

From here, the “day range low” could stand in the way as immediate support over the next 24 hours. Looking beyond that, the March 1st low at 0.7186 would be the next target which is just above the February 8th low.

On the other hand, if prices turn higher they will face immediate resistance which could be a combination of the aforementioned minor level and the “day range high” at 0.7298. A push above those exposes the 23.6% Fibonacci retracement at 0.7341.

NZD/USD Implied Volatility at 1-Month High, Major Moves Ahead?

New Zealand Dollar Trading Resources:

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES