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
NZD/USD Rate Struggles Again at Former Support Zone

NZD/USD Rate Struggles Again at Former Support Zone

2020-05-21 05:00:00
David Song, Strategist
Share:

New Zealand Dollar Talking Points

NZD/USD tags a fresh monthly high (0.6158) after failing to test the April low (0.5843), but the recent rebound in the exchange rate appears to be stalling ahead of the former support zone around 0.6170 (50% expansion) to 0.6230 (38.2% expansion) as it struggles to extend the series of higher highs and lows from earlier this week.

NZD/USD Rate Struggles Again at Former Support Zone

NZD/USD continues to track the April range even though the Reserve Bank of New Zealand (RBNZ) expands its Large Scale Asset Purchase (LSAP) programto NZ$60 billion from NZ$33 billion, but the update to New Zealand’s Retail Sales report may produce a bearish reaction in the exchange rate as private sector consumption is expected to contract 1.5% following the 0.7% expansion during the last three months of 2019.

The economic shock from COVID-19 may push the RBNZ to further support the economy as officials favor “delivering stimulus sooner rather than later,” but it seems as though the central bank is in no rush to implement a negative interest rate policy (NIRP) as Governor Adrian Orr insists that “we don’t want to go negative at this point” during an interview with Bloomberg News.

During the post Monetary Policy Statement (MPS) webinar,Chief Economist Yuong Ha tamed speculation for an imminent rate cut as the RBNZ expects to hold the official cash rate (OCR) at the record low until March 2021, with the official going onto say that “we’ve given the banking system until the end of the year to get ready so that the option is there for the Monetary Policy Committee (MPC) in a year’s time.”

The comments suggest the RBNZ will continue to utilize its balance sheet in 2020 as “the Monetary Policy Committee is prepared to use additional monetary policy tools if and when needed,” and Governor Orr and Co. are likely to retain a dovish forward guidance at the next meeting on June 24 even though “members noted that the main thing needed to support the economy is fiscal stimulus.”

With that said, speculation for a NIRP in New Zealand may drag on NZD/USD especially as Federal Reserve Chairman Jerome Powell tames bets for negative US interest rates, but the exchange rate may trade within a more defined range over the coming days as the recent rebound appears to be stalling ahead of the former support zone around 0.6170 (50% expansion) to 0.6230 (38.2% expansion).

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 (0.5992) crossed below the 200-Day SMA (0.6319).
  • The negative slope in both the 50-Day SMA and the 200-Day SMA offer a bearish outlook for NZD/USD, and the advance from the yearly low (0.5469) appears to appears to be capped by the former support zone around 0.6170 (50% expansion) to 0.6230 (38.2% expansion) as both price and the Relative Strength Index (RSI) snap the bullish formations from March.
  • Nevertheless, recent price action warns of range bound conditions as NZD/USD tags a fresh monthly high (0.6158) after failing to test the April low (0.5843), with a move below the 0.6070 (100% expansion) to 0.6100 (61.8% expansion) region bringing the 0.6000 (100% expansion) to 0.6010 (161.8% expansion) area on the radar.
  • Need a break of the April low (0.5843) to open up the Fibonacci overlap around 0.5740 (78.6% retracement) to 0.5790 (61.8% retracement), with the next area of interest coming in around 0.5640 (261.8% 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.