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
EUR/USD
Mixed
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/2MCG036HGH https://t.co/CbnRsuyRwi
  • #Gold saw its worst performance the past 5 days in 5 months as longer-dated government bond yields in developed countries rose Could this be the beginning of a turning point in #XAUUSD? https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/08/15/Gold-Price-Outlook-Will-XAUUSD-Brush-off-Worst-Week-in-5-Months.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/x2Indk3b7P
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out: https://t.co/td5WA4hCZC https://t.co/PT09ZsIOCa
  • The US #Dollar may rise, buoyed by haven demand as fiscal stimulus talks stagnate and swelling tensions between Washington and Beijing sink trade talks. Get your #currencies update from @DanielGMoss here: https://t.co/Wcw9PDUr67 https://t.co/gnYZYl6aLV
  • Upside in #CrudeOil struggling ahead of #OPEC meeting. Cartel likely to maintain wait and see approach. Get your #commodities update from @JMcQueenFX here: https://t.co/gNHHKoTUzm https://t.co/eF40DRIBJ5
  • #Gold had some big moves last week, and while vol is expected to die down a bit, it will be important to see if gold can hold its ground in the coming days/weeks. Get your #metals update from @PaulRobinsonFX here: https://t.co/N8a84hRnHN https://t.co/3fjodPHTDm
  • The S&P 500's refusal to hit a record and Dollar's anchor to range this past week is sign of summer liquidity conditions, but the quiet is not insurmountable. 'S&P 500 Record and Dollar Break Look to Stimulus and Trade to Override Seasonality' https://www.dailyfx.com/forex/video/daily_news_report/2020/08/15/SP-500-Record-and-Dollar-Break-Look-to-Stimulus-and-Trade-to-Override-Seasonality-.html https://t.co/mbvPkdQfYl
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/DmhBkcMZBK https://t.co/kFk6ccU3Sk
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/aXSB0bG3y0
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/1G7CRsegRX https://t.co/i342ipPuvW
NZ Dollar Outlook Mired by Failed Attempt to Test Former Support Zone

NZ Dollar Outlook Mired by Failed Attempt to Test Former Support Zone

2020-04-17 00:02:00
David Song, Strategist
Share:

New Zealand Dollar Talking Points

NZD/USD attempts to retrace the decline from earlier this week even though the Reserve Bank of New Zealand (RBNZ) endorses a dovish forward guidance for monetary policy, but the exchange rate may exhibit a more bearish behavior following the failed attempt to test the former support zone around 0.6170 (50% expansion) to 0.6230 (38.2% expansion).

NZ Dollar Outlook Mired by Failed Attempt to Test Former Support Zone

NZD/USD bounces back from the weekly low (0.5922) ahead of China’s Gross Domestic Product (GDP) report, and the update may undermine the recent rebound in the exchange rate as the growth rate is expected to contract 6.0% per annum in the first quarter of 2020.

The weakening outlook for the Asia/Pacific region may drag on NZD/USD as it puts pressure on the RBNZ to further support the economy, and the central bank may continue to push monetary policy into uncharted territory as Governor Adrian Orr strikes a dovish tone in front of New Zealand lawmakers.

Recent remarks from Governor Orr suggest the RBNZ will continue to deploy unconventional tools to combat the slowdown in economic activity as the central bank head reveals that “we haven’t ruled out negative interest rates, we just chose the quantitative easing path first.”

Image of RBNZ interest rate decisions

Source: RBNZ

Governor Orr went onto say that the Monetary Policy Committee (MPC) could also further utilize its balance sheet as the RBNZ expands the Large Scale Asset Purchase programme (LSAP)to include NZ$ 3B of Local Government Funding Agency (LGFA) debt, and the nationwide lockdown may force the central bank to implement more non-standard measures as New Zealand’s Treasury outlines five different economic scenarios following COVID-19, with the growth rate expected to decline around 13% in Scenario 1, the least restrictive of the scenarios considered.”

With that said, it remains to be seen if the RBNZ will make a major announcement at its next interest rate decision on May 13 as the central bank plans to “update its economic assessment and the size and scope of the LSAP at its next scheduled meeting,” but the dovish forward guidance may present headwinds for the New Zealand Dollar as RBNZ keeps the door open to implement a negative interest rate policy (NIRP).

In turn, NZD/USDmay exhibit a more bearish behavior following the failed attempt to test the former support zone around 0.6170 (50% expansion) to 0.6230 (38.2% expansion), and the exchange rate may struggle to retain the rebound from the yearly low (0.5469) as it snaps the upward trending channel carried over from the previous month.

Forex for Beginners
Forex for Beginners
Recommended by David Song
Forex for Beginners
Get My Guide

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 (0.6185) crosses below the 200-Day SMA (0.6408).
  • The negative slope in both the 50-Day SMA and the 200-Day SMA offer a bearish outlook for NZD/USD, but recent price action raises the scope for a larger correction as the exchange rate negates a bear flag formation and breaks out of a narrow range, while the Relative Strength Index (RSI continues to track the upward trend carried over from the previous month.
  • Break/close above the Fibonacci overlap around 0.6070 (100% expansion) to 0.6100 (61.8% expansion) brings the former support zone around 0.6170 (50% expansion) to 0.6230 (38.2% expansion) on the radar, with the next area of interest coming in around 0.6310 (100% expansion) to 0.6320 (23.6% expansion).
Traits of Successful Traders
Traits of Successful Traders
Recommended by David Song
Traits of Successful Traders
Get My Guide

--- 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

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.