NZD looks to weaken

17 February, 2017

NZD looks to weaken

The New Zealand dollar has found itself under pressure in recent days as the market has started to hedge a little while it waits on the next steps for the US economy. Trumps term has seen large speculation around fiscal stimulus and tax changes, which so far have not materialised and in turn the market looks to be taking a breather and nowhere is this more apparent than with commodity currencies. The New Zealand dollar has so far tried to bounce back in recent days but has not been helped by the RBNZ putting out headlines that it believes upward pressure is weakening, and also today's drop in retail sales q/q to 0.8% (1.0% exp) has pushed back on the market. It seems unlikely that the RBNZ will even consider looking to move rates any higher until it hits the inflation target of 2.0% and that is certainly some time off at this stage.

For the NZDUSD on the charts the trend has always been your friend, but it's lost a lot of momentum over the past week with the NZDUSD dipping through the 20 day moving average before finding some support around 0.7167. From here the bulls have tried to wrestle back some control to push the NZDUSD higher but the push upwards came up short of the 20 day moving average and resistance at 0.7238. Unless we see any further momentum here we could see some strong waves lower on the chart, but the 50 day and 100 day moving average will likely act as dynamic support and it will be interesting to see what levels it looks to respect.

Recently I touched on gold as well in the current market climate and it's continued role in the current market environment. Certainly with some investors slightly worried about the political turmoil gold seems like a safe bet and an easy one for when the markets are spooked, and investors so far have more than taking a liking to it. The rise has also been lead in part by the weakening of the USD - despite the recent positive unemployment claims figure of 239K (245K exp). With further turmoil likely to occur the Trump administration announces its fiscal and tax plans, there is a possibility we could see further gains for gold.

Resistance has so far held back the advances of gold with a strong level forming around 1245.50 which has so far defeated the majority of bullish movements. Further drops lower for gold have been aggressively defended at the 20 day moving average, showcasing a strong willingness for the bulls to keep the precious metal in play. With the 20 day moving average still pushing higher we could see consolidation followed by a break out to the next level at 1262.18. However entry points are likely only to be found on key levels as the market seems very prone to pivoting.


Source link  
USD stages comeback on CPI and retail data

It's been a positive day for US economic data as retail sales surprised analysts lifting to 0.2% (0.0% exp). This shows a strong build up in the period...

Currencies bound ahead of Fed decision

It is a quiet Wednesday in the currency markets. Traders are favoring to remain on the sidelines ahead of multiple key risk events...

Asian equities flat

Equities across the Asian markets were trading in a tight narrow range on Thursday, ignoring solid Chinese data and the new records on Wall Street, where the Dow Jones Industrial...


Inflation continues to worry FED

FOMC minutes were released today and painted some interesting pictures on the state of the US economy. So far FED members are calling for...

Pound struggles on uncertanity

Conviction in the pound seems to have fallen off the way side after the most recent days of trading with the pound taking further hits as it slides...

Geopolitical risks return to the front seat

Demand for safe havens returned on Monday as war of words between North Korea and the U.S. triggered flight to safety amongst investors...


RBA minutes offer guidance on economy

The Australian economy has hit the spotlights as the Reserve Bank of Australia meeting minutes are out. As usual it's quick to point the finger...

Softened sanctions on North Korea

Investors returned from the weekend with a high appetite for risk assets, sending the S&P 500 to a new record high on Monday, with global equities...

AUD traders bet on RBA minutes

The Australian dollar has surged in Monday trading as it looked to push through a key level of resistance at 0.7833, this is a bit of a surprise...

  


Share: