NZDUSD Poised for Declines Post the NZIER Business Confidence07 July, 2015 by Aayush Jindal in Market Analysis
- New Zealand Dollar continued to weaken against most currencies, including the US Dollar.
- NZDUSD traded below 0.6680 and looks set for more declines in the near term.
- In New Zealand, the NZIER Business Confidence released by the New Zealand Institute of Economic Research came in at 5%, compared with the last 23%.
NZIER Business Confidence
Earlier during the Asian session, the NZIER Business Confidence, which shows the business outlook in New Zealand was released by the New Zealand Institute of Economic Research. The outcome was on the lower side when compared with the last reading of 23%, as the NZIER Business Confidence posted a rise of 5%. The headline of the report published was that the “latest NZIER Quarterly Survey of Business Opinion shows the New Zealand economy losing momentum”. It shows that the outcome was not good enough to help the New Zealand Dollar.
One of the most important points to note was that the Business confidence declined to the lowest level since September 2012. Overall, the effects of lower dairy prices are having an impact on the economy, and might push the New Zealand Dollar further moving ahead.
The NZDUSD pair was seen under pressure after the release, as buyers were not impressed at all by the outcome. The pair traded below an important support area of 0.6680 to clear the way for more losses in the near future.
NZDUSD Technical Analysis
The NZDUSD pair formed a contracting triangle on the hourly chart, which was broken recently. There was a failure noted around the 76.4% Fib retracement level of the last wave from the 0.6733 high to 0.6648 low. Moreover, the triangle resistance trend line acted as a catalyst for a down-move. The most critical point is that the pair is well below the 100 and 200 simple moving average, suggesting the amount of bearish pressure on NZDUSD.
On the downside, the last low of 0.6648 is a support area. If there is a break below the mentioned area, a move towards 0.6600 is possible. The pair might remain under the bearish pressure, as long as it is below the 100 hourly MA.
On the upside, the broken triangle may also act as a resistance for buyers moving ahead.