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.

Free Trading Guides
EUR/USD
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
GBP/USD
Mixed
USD/JPY
Mixed
Gold
Bullish
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
Bitcoin
Mixed
More View more
Real Time News
  • The $AUD has risen in anticipation of a deal Washington and Beijing. But the Australia-China trade relationship has not suffered much and may even have been helped by China’s spat with the US. Get your market update from @DavidCottleFX here:https://t.co/An7h5X0Zcz https://t.co/Rn7mLbS1EF
  • How can traders avoid #FOMO in trading? Start by implementing a well-heeled plan taking only four hours per week. Get your insight from @JStanleyFX here: https://t.co/vwUShQPc27 #tradingstyle https://t.co/0Wn4xBL0AY
  • Do you know which type of stock is the right investment for you? Stock types help investors decide on specific #stocks to trade or assist with valuation methods either fundamentally or technically. Learn more about stock types here: https://t.co/yO3JalkqUU https://t.co/RoNdExHAdt
  • The status of the US #dollar as the safe-haven asset of choice remains untouched and any weakness in the greenback is likely to be short-lived. Get your $USD market update from @nickcawley1 here: https://t.co/LO2u38jpUT https://t.co/ctgCJSOeTH
  • #FTSE 100 testing key support as the index lacks a directional bias. #DAX reverses off channel top. Get your indices technical analysis from @JMcQueenFX here: https://t.co/IHF2dgMfg9 https://t.co/2fMTFlOeTR
  • With knowledge of price action, traders can perform a wide range of technical analysis functions without the necessity of any indicators, including management of risk. Build on you knowledge of price action here: https://t.co/9hQA0bsYtt https://t.co/5KQowxuiBf
  • The term ‘Ichimoku,’ literally means ‘one glance,’ in Japanese. Ichimoku, or the one glance indicator, is considered to be a self-contained system in the fact that no additional indicators are necessary. Learn more about the 'one glance' indicator here: https://t.co/T7o7W9C0Ro https://t.co/7bhBfWvEkR
  • Support and resistance are the cornerstone of technical analysis, making it the foundation that you build your knowledge on. Build a stronger foundation here: https://t.co/yXLaRpl90I https://t.co/85JHunf2Xf
  • Many traders ask how a trading method that is 77 years old is applicable today. Learn about the Gartley pattern and see how you can incorporate it into your trading style here: https://t.co/2yPmGH0XvT https://t.co/rtqUKZSdn1
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/ywv7RVP9qY
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

News & Analysis at your fingertips.