The New Zealand dollar had a positive week, enjoying the beat in CPI. The upcoming week features the jobs report among other figures. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.
New Zealand’s consumer price index rose by 0.4% in Q4, stronger than 0.3% that had been expected. This limits the scope for rate cuts. Credit Card Spending also saw a solid rise of 0.4%. In the US, Trump’s first week in the White House was quite busy.
Updates:
NZD/USD daily graph with support and resistance lines on it. Click to enlarge:
- Trade Balance: Sunday, 21:45. New Zealand saw a wider than projected trade deficit in November, at -705 million. A surplus was last seen in June. Yet another deficit is on the cards.
- Visitor Arrivals: Monday, 21:45. Tourism plays a key role in the New Zealand economy, with inspiration from Lord of the Rings lasting for a long time. A rise of 0.5% was seen in December.
- Jobs report: Tuesday, 21:45. New Zealand is unique in publishing its jobs report solely on a quarterly basis, making the publication a bigger deal than elsewhere. In Q3 2016, employment jumped by 1.4% and the unemployment rate dropped to 4.9%, to the envy of many countries. The labor cost index also advanced by 0.4%. Another improvement is probable, but such a jump in employment seems unlikely.
- ANZ Commodity Prices: Friday, 00:00. As an exporter of commodities, prices certainly matter, albeit the GDT number has a greater effect. An increase of 0.7% was seen in December.
NZD/USD Technical Analysis
Kiwi/dollar advanced above 0.73 but fell short of the 0.7330 level mentioned last week. It then consolidated the gains.
Technical lines, from top to bottom:
The round number of 0.74 served as resistance and support back in 2015. 0.7310 was the high point in January 2017.
0.7265 was a swing high in October 2016 and works as resistance. 0.7230 served as support in September 2016.
