NZDUSD – New Zealand Dollar Could Make a Sustained Move Lower

Key Highlights

  • 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“.

ANZ

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.

NZDUSD

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.



Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

Aayush's latest posts