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. See our updated Privacy Policy here.

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
More View more
Real Time News
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACyvdZ https://t.co/6VjW5FEiQW
  • Global stocks bounce back from recent pullback as key resistance levels lie ahead. Get your weekly equities forecast from @HathornSabin here: https://t.co/wXSWo1JygD https://t.co/vWVaSEQTXT
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9FlspUVZz https://t.co/9kfBu04auM
  • Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic. Learn how you can control FOMO in your trading here: https://t.co/lgDf5ddzFV https://t.co/8GJ6OQYgnW
  • Bitcoin (BTC) started the day on the front foot on the Twitter news before the latest China crypto ban hammered the market lower. Get your weekly crypto forecast from @nickcawley1 here: https://t.co/ZKHGXeVhsR https://t.co/QSltMQml6N
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/DSp7f3YuAx
  • Technical analysis of charts aims to identify patterns and market trends by utilizing differing forms of technical chart types and other chart functions. Learn about the top three technical analysis tools here: https://t.co/KDjIjLdTSk https://t.co/HNqHcbL6vk
  • The US Dollar continues to push higher against ASEAN currencies after the FOMC rate decision. This leaves the USD/SGD, USD/THB, USD/PHP and USD/IDR outlook mostly tilted higher. Get your market update from @ddubrovskyFX here:https://t.co/zn56iTFBxM https://t.co/FbepD4RaFg
  • The US Dollar seems to be back on the offensive against its major counterparts, pressuring EUR/USD and NZD/USD lower as USD/JPY consolidates. USD/CHF surges past key resistance. Get your market update from @ddubrovskyFX here:https://t.co/MrLGSp7FYa https://t.co/XS0176LyOg
  • The Japanese Yen remains in focus with strength potential on risk aversion themes to go along with weakness on themes around higher rates. Get your weekly $JPY technical forecast from @JStanleyFX here: https://t.co/l4UICqJzJy https://t.co/dQ2pS0E4fp
NZD/USD Trades to Fresh 2020 as RSI Pushes Deeper Into Oversold Zone

NZD/USD Trades to Fresh 2020 as RSI Pushes Deeper Into Oversold Zone

David Song, Strategist

New Zealand Dollar Talking Points

NZD/USD trades to a fresh yearly low (0.5691) as the Reserve Bank of New Zealand (RBNZ) stands ready to deploy unconventional tools, and the exchange rate may extend the series of lower highs and lows from the previous week as the Relative Strength Index (RSI) pushes deeper into oversold territory.

NZD/USD Trades to Fresh 2020 as RSI Pushes Deeper Into Oversold Zone

NZD/USD extends the decline following the emergency RBNZ rate cut to trade at its lowest level since 2009, with the exchange rate showing a limited reaction to the updated Gross Domestic Product (GDP) report even though New Zealand grew 1.8% during the last three-months of 2019 versus forecasts for a 1.7% print.

NZD/USD may continue to exhibit a bearish behavior as the RBNZ emphasizes that “Large Scale Asset Purchases of New Zealand Government bonds were the next best monetary tool available to the Committee,” and it seems as though Governor Adrian Orr and Co. will continue to push monetary policy into uncharted territory as the central bank also plans to “delay or slow down most of its regulatory initiatives for an initial period of six months.

Image of RBNZ interest rate decisions

In turn, the RBNZ may resort to unconventional tools to combat the weakening outlook for global growth as the central bank insists that “a negative OCR would not be implemented,” and it remains to be seen if Governor Orr and Co. will make a major announcement at the next meeting on May 13 as Chief Economist Yuong Ha insists that the asset-purchase program would be ready “as soon as possible but certainly by the May round if we needed to” during an interview with Bloomberg News.

With that said, the RBNZ may continue to highlight a dovish forward guidance even though Prime Minister Jacinda Ardern prepares as “significant” fiscal stimulus package, and the New Zealand Dollar may face a more bearish fate over the coming days as NZD/USD extends the series of lower highs and lows from the previous week, while the Relative Strength Index (RSI) pushes deeper into oversold territory.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

NZD/USD Rate Daily Chart

Image of NZD/USD rate daily chart

Source: Trading View

  • Keep in mind, NZD/USD has failed to retain the range from the second half of 2019 as the decline from earlier this year produced a break of the October low (0.6204), with a ‘death cross’ taking shape in March as the 50-Day SMA (0.6381) crosses below the 200-Day SMA (0.6457).
  • Recent developments in the Relative Strength Index (RSI) suggest the bearish momentum will persist as the oscillator holds below 30 and pushes deeper into oversold territory.
  • Break/close below the Fibonacci overlap around 0.5740 (78.6% retracement) to 0.5790 (61.8% retracement) brings the 0.5640 (261.8% expansion) region on the radar, with the next area of interest coming in around 0.5530 (161.8% expansion).

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

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

DISCLOSURES