NZDUSD – New Zealand Dollar Could Make a Sustained Move Lower29 May, 2015 by Aayush Jindal in Fundamental Analysis, Market Analysis, NZDUSD, Technical Analysis
- New Zealand Dollar weakened versus the US Dollar, and looks poised for more downsides in the short term.
- New Zealand Business Confidence released by the ANZ fell sharply from 30.2 to 15.7 in April 2015.
- In Australia, the HIA New Home Sales released by the Housing Industry Association posted an increase of 0.6% in April 2015, compared with the last gain of 4.4%.
ANZ Business Confidence
Earlier during the Asian session, the New Zealand Business Confidence, which shows the business outlook in New Zealand was released by the ANZ. The outcome was on the lower side, as the ANZ Business Confidence fell from the last reading of 30.2 to 15.7 in April 2015. The main highlight of the report was that “economic patient is beginning to suffer a few palpitations, but there is no need to reach for the defibrillator just yet“.
Some parameters to note were Employment intentions, which moved from +22 to +17, Profit expectations was lower from +26 to +20 and Export intentions fell to +19 from +23. The most important point was that the mention that the Inflation expectations fell to a new low of 1.6%. Overall, the outcome was disappointing, which to some extend weighed on the Kiwi Dollar as well. The NZUDSD pair is under bearish pressure and might continue to head lower.
NZDUSD – Technical Analysis
The NZDUSD pair fell sharply recently once it broke the 0.7200 support area. There was an expanding triangle pattern formed on the hourly chart, which was breached by sellers. The downside was swift after the break, which took the pair lower towards 0.7120.
The pair made an attempt to recover some ground, but found sellers just below the 50% Fib retracement level of the last drop from the 0.7265 high to 0.7127 low. The hourly RSI is well below the 50 level, suggesting that the pair might continue to trade lower in the near term.
US Gross Domestic Product
Later today in the US, the Gross Domestic Product Annualized, which calculates the monetary value of all the goods, services and structures produced will be released by the US Bureau of Economic Analysis. The market is expecting a decline of 0.8%. However, if the outcome exceeds the forecast, the US Dollar might trade higher.