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New Zealand Dollar Outlook: NZD/CAD, NZD/CHF, NZD/JPY

New Zealand Dollar Outlook: NZD/CAD, NZD/CHF, NZD/JPY

2020-03-05 02:00:00
Dimitri Zabelin, Analyst
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NEW ZEALAND DOLLAR PRICE CHART, NZD/CAD, NZD/CHF, NZD/JPY – TALKING POINTS

NZD/CAD PRICE CHART

After breaking below the October 2019 uptrend, NZD/CAD has suffered an over-three percent loss. However, the pair’s bounce from multi-month lows suggests a recovery may be in the cards with selling pressure showing signs of exhaustion. NZD/CAD may seek to challenge resistance between 0.8499 and 0.8524, which if cleared with a daily close, could push the pair higher if it spurs bullish sentiment.

NZD/CAD – Daily Chart

Chart showing NZD/CAD

NZD/CAD chart created using TradingView

NZD/CHF TECHNICAL ANALYSIS

NZD/CHF is showing signs that it is bottoming out as it trades at five-year lows after declining more than 7.80 percent and trading below descending resistance. The pair is now eyeing formidable but familiar support-turned-resistance between 0.6165 and 0.6223. The pair’s short-term trajectory will likely be determined by how NZD/CHF interacts at the cross section between descending resistance and the multi-layered ceiling.

NZD/CHF – Daily Chart

Chart showing NZD/CHF

NZD/CHF chart created using TradingView

If the pair is able to crack both barriers with follow-through, renewed hope for further upside gains could catapult NZD/CHF until it encounters friction between 0.6386 and 0.6405. However, if confidence wilts in the face of the key intersection (labelled as “Alpha”) and the pair subsequently retreats, a bearish overhang may haunt NZD/CHF and a near-term recovery could become difficult to achieve.

NZD/JPY FORECAST

NZD/JPY may be gearing up for a comeback after showing signs of alleviated selling pressure and kindling interest on the part of buyers. Having said, upside gains may be capped by multi-tiered resistance between 69.897 and 70.030. However, if the pair is able to surmount this terrain, the next obstacle will be clearing the 71.044-71.493 ceiling where price action from before encountered several stalling points.

NZD/JPY – Daily Chart

Chart showing NZD/JPY

NZD/JPY chart created using TradingView

NEW ZEALAND DOLLAR ANALYSIS: WHAT COULD HINDER A RECOVERY?

The New Zealand Dollar’s cycle-sensitive nature and strong reliance on China’s economic activity makes it particularly vulnerable to the impact of the coronavirus on global growth and commodity demand. Consequently, if the fundamental outlook significantly deteriorates and falls below the baseline projection, inflamed RBNZ rate cut bets may pressure the New Zealand Dollar and cut the recovery against CHF, JPY and CAD short.

NEW ZEALAND DOLLAR TRADING RESOURCES

--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com

To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter

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

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