The New Zealand dollar created an impressive double-top on high ground only to fall down. Where is it headed next? An RBNZ report and retail sales stand out. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.
Milk prices dropped once again, ending two auctions that saw rises. However, the jobs report was positive: higher wages and and 1.2% jump in employment beat the rise in the unemployment rate in New Zealand. Despite this data, NZD/USD was hit by a rising US dollar, which enjoyed a big turnaround. In addition, the kiwi was influenced by the Aussie: the RBA cut rates and market participation suspect the RBNZ is next.
Updates:
NZD/USD daily graph with support and resistance lines on it. Click to enlarge:
- RBNZ Financial Stability Report: Tuesday, 21:00, with follow-up appearances by RBNZ governor Graeme Wheeler on Wednesday at 1:10. The central bank releases this report twice a year and in theory it focuses on financial stability. However, it usually encompasses other economic aspects such as growth, inflation, etc. The governor could use the report or at least his public appearance to let his views known about the next moves of the RBNZ, especially in light of the RBA cut.
- Business NZ Manufacturing Index: Wednesday, 22:30. This PMI like gauge of the manufacturing sector has been quite positive of late. After 54.7 for March, a similar number is likely for April.
- FPI: Wednesday, 22:45. The Food Price Index provides some insights about New Zealand’s food exports. Prices rose by 0.5% in March. Remember that the GDT number is of higher importance.
- Retail sales: Thursday, 22:45. As with many other NZ indicators, it is only a quarterly publication, making it far more important than the monthly data published elsewhere. A gain of 1.2% was seen in Q4 2015 and a rise of 1% is on the cards now. Core sales carry expectations for 1.1% after 1.4% beforehand.
