NZDUSD

Summary: Buy Now

Moving Average: Buy
Technical Indicators: Buy
Fundamentals NZDUSD: Buy/Buy

NZDUSD Live Chart


NZDUSD Technical Review by IRONFOREX

nzdusd

NZDUSD edged higher during the European day Wednesday, but the advance stayed limited marginally above the round figure of 0.7000 (R1).

The price structure on the 4-hour chart still suggests a short-term uptrend, but I prefer to wait for a decisive move above 0.7000 (R1) before getting confident on its continuation.

Something like that could open the way for the next resistance zone of 0.7050 (R2), marked by the peaks of the 19th of April and the 3rd of May.

Taking a look at our short-term oscillators though, I see signs that a corrective setback could be in the works before the next positive leg. The RSI has just exited its above-70 territory, while the MACD has topped and fallen below its trigger line.

What is more, there is negative divergence between both these indicators and the price action. Zooming out to the daily chart, I see that on the 30th of May, the pair started recovering from near the 50% retracement level of the 20th of January – 20th of April uptrend.

I believe that a clear close above 0.7050 (R2) is needed to confirm a forthcoming higher high on the daily chart and signal the resumption of the prevailing longer-term uptrend.

  • Support: 0.6960 (S1), 0.6900 (S2), 0.6840 (S3)
  • Resistance: 0.7000 (R1), 0.7050 (R2), 0.7130 (R3)

NZDUSD Fundamental Review by IRONFOREX

In New Zealand, the RBNZ will announce its monetary policy decision during the Asian morning Thursday and the officials are expected to remain on hold at this meeting. Even though we believe that low 2-year inflation expectations are probably the Bank’s biggest concern and may trigger further near-term rate cuts, we agree that policymakers are likely to hold their fire at this gathering.

We consider the nation’s elevated home prices to be a notable limitation to officials’ ability to reduce rates, as further cuts could inflate prices even more and risk financial instability.

Therefore, we expect policymakers to announce new macro-prudential measures aimed at curbing rising house prices before implementing any further rate cuts. However, given that market expectations for this meeting point to a close call, NZD/USD could extend its recent gains on a decision to remain on hold.

 

Trading the NZDUSD

With the current outlook, it is a buy

Position Preference:

1- 70% Long

2- 20% Neutral

3- 5% Short

Factors Influencing the NZDUSD

  • Inflation Rate.
  • Employment Rate.
  • Monetary Policies.
  • GDP
  • UK’s Confidence and Sentiment. Follow “Gfk Consumer Confidence” and “Nationwide Consumer Confidence”
  • UK’s Balance of Payments. Follow ” Trade Balance” and  “Current Account”
  • New Zealand Gross Domestic Product is heavily dependent upon the agricultural products.
  • New Zealand’s economic stability is directly connected to the economic conditions prevailing in Australia.
  • New Zealand dollar is a commodity linked currency. If commodity prices appreciate, the price of the NZD should also increase.

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