NZD/USD coils ahead of FOMC and NZ GDP
Fawad Razaqzada March 20, 2019 2:10 PM
The NZD/USD might not be the most obvious pair to monitor the US dollar’s movement against tonight, but there is a good reason why this pair should be watched closely.
The NZD/USD might not be the most obvious pair to monitor the US dollar’s movement against tonight, but there is a good reason why this pair should be watched closely. Some three-and-three-quarter hours after the FOMC’s policy statement and economic projections are released, Statistics New Zealand will publish the nation’s latest growth figure. New Zealand GDP is expected to have expanded at a faster pace of 0.6% q/q in Q4 after a disappointing 0.3% q/q expansion in Q3. We think that a reading above 0.6% should help to maintain the recent short-term bullish price structure on the Kiwi, assuming that the FOMC is not too hawkish beforehand.
Technically, the higher lows that have been created since October suggests the path of least resistance is to the upside for the NZD/USD. The fact that price is holding its own above the 50- and 200-day moving averages are additional bullish indications. However, more recently, the kiwi has put in a few lower highs too, creating a couple of short-term bearish trend lines. Thus, a potential break above these trend lines is needed to re-affirm the bullish bias. The first of the two bearish trend lines converges with resistance around 0.6875. So, a clean break above this level could trigger fresh technical buying towards this year’s high (0.6942) and eventually the next psychologically-important level of 0.7000. However, all bets would be off should the support trend line break down first.
Source: TradingView and FOREX.com
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.