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
EUR/USD
Mixed
Oil - US Crude
Bearish
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
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Commodities Update: As of 13:00, these are your best and worst performers based on the London trading schedule: Gold: 0.04% Silver: -1.18% Oil - US Crude: -2.76% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ccCknbeGYC
  • Heads Up:🇺🇸 New Home Sales MoM (SEP) due at 14:00 GMT (15min) Expected: 2.8% Previous: 4.8% https://www.dailyfx.com/economic-calendar#2020-10-26
  • There is very little on the economic calendar this week to guide Sterling, while the latest coronavirus numbers show new infections around 20,000 while there have been another 151 fatalities. Get your $GBPUSD market update from @nickcawley1 here:https://t.co/Uj5UYAuwjE https://t.co/IooP7cx5PT
  • Indices Update: As of 13:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.04% France 40: -0.73% US 500: -1.05% Wall Street: -1.15% Germany 30: -2.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/3eOsVdmfov
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.84%, while traders in EUR/USD are at opposite extremes with 73.21%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/EwayAGFbnA
  • LIVE NOW: Join Technical Strategist @MBForex for his Weekly Strategy Webinar to review the setups we're tracking into the open of the week! https://t.co/chKtG7waxH
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.02% 🇬🇧GBP: 0.00% 🇦🇺AUD: -0.13% 🇨🇭CHF: -0.29% 🇪🇺EUR: -0.35% 🇨🇦CAD: -0.50% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/mZiZqBCZLu
  • Heads Up:🇺🇸 Chicago Fed National Activity Index (SEP) due at 12:30 GMT (15min) Expected: 0.39 Previous: 0.79 https://www.dailyfx.com/economic-calendar#2020-10-26
  • Weekly Strategy Webinar starting in 15mins on DailyFX! https://t.co/lxd5fZnn4H
  • 🇲🇽 Economic Activity YoY (AUG) Actual: -9.4% Expected: -8.2% Previous: -9.9% https://www.dailyfx.com/economic-calendar#2020-10-26
NZDUSD Clears Support as New Zealand Dollar Drops on RBNZ Rate Cut

NZDUSD Clears Support as New Zealand Dollar Drops on RBNZ Rate Cut

2019-05-08 02:00:00
Daniel Dubrovsky, Analyst
Share:

NZD/USD, RBNZ Talking Points

  • New Zealand Dollar tumbles as RBNZ cut rates to 1.50%
  • NZD/USD downtrend may extend on trade war concerns
  • Trader positioning warns a bearish contrarian NZD bias

Trade all the major global economic data live as it populates in the economic calendar and follow the live coverage for key events listed in the DailyFX Webinars. We’d love to have you along.

NZD/USD Drops as RBNZ Cuts Rates

The New Zealand Dollar initially declined as much as 1.20% after the RBNZ cut rates to 1.50% from 1.75% as anticipated. This was the first cut since November 2016. Heading into the announcement, markets were becoming increasingly certain of a cut to the RBNZ official cash rate and the central bank has been trying to prepare the markets for such an outcome.

Back in March, the RBNZ clearly expressed its dovish bias as it noted that risks to the outlook had increased. It was not in vain, since then we have had disappointing first quarter New Zealand inflation and jobs data. The regional Citi economic surprise index has been heading negative lately. This shows domestic economic data tending to underperform relative to economists’ expectations.

Looking at what the central bank said today, the RBNZ noted that inflation is expected to rise slowly. The rate cut was seen as necessary to support overall employment conditions and meeting the CPI target. Meanwhile, the RBNZ said that an important downside for risk is a larger-than-expected slowdown in global economic growth.

Speaking of which, these past few days have witnessed a revival in US-China trade war fears. A deal between the two economic powerhouses is looking less likely after US President Donald Trump expressed his displeasure with the pace of negotiations. This was followed by a threat to raise tariffs on roughly $200b in Chinese imports from 10% to 25% come Friday.

With that in mind, the VIX volatility index has recently surged higher as the S&P 500 and Dow Jones experienced their worst days since March. Concerns over a breakdown in US-China trade talks is a downside risk for the sentiment-oriented Kiwi Dollar and may end up extending declines. A delegation team from China is still scheduled to arrive on Thursday for continued negotiations.

NZD/USD 5-Minute Chart Reaction to RBNZ

NZDUSD Clears Support as New Zealand Dollar Drops on RBNZ Rate Cut

Chart Created in TradingView

NZD/USD Technical Analysis

Taking a closer look at the NZD/USD daily chart, we can see that it is attempting to extend the dominant downtrend since the previous RBNZ rate decision. This is defined by the descending channel (blue lines). Support appears to be on the verge of being taken out under 0.6592 which would open the door to testing 0.6501. You can follow me on Twitter for the latest updates on NZD here at @ddubrovskyFX.

NZD/USD Daily Chart

NZDUSD Clears Support as New Zealand Dollar Drops on RBNZ Rate Cut

Chart Created in TradingView

Meanwhile, on the next chart below, trader positioning warns of a bearish NZD/USD contrarian trading bias. Traders are further net-long than yesterday and last week. If you would like to learn more about how to use sentiment as a compliment to fundamental and technical analysis, join me each week as I uncover the prevailing trends in markets.

NZD/USD Client Positioning

NZDUSD Clears Support as New Zealand Dollar Drops on RBNZ Rate Cut

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