The New Zealand dollar reached new levels last seen in 2015 but could not reach the promised land of 0.75. The GDP release is the main event for the upcoming week. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.
Milk prices enjoyed big gains for the third consecutive time, with 7.7% this time. The higher dairy prices certainly helped NZD/USD. Another factor pushing the pair to the upside was the weakness of the US dollar. The services sector indicator fell sharply and triggered a USD sell-off. However, the greenback eventually recovered.
Updates:
NZD/USD daily graph with support and resistance lines on it. Click to enlarge:
- FPI: Monday, 22:45. The Food Price Index is eyed due to New Zealand’s soft-commodity export, even though the GDT Price Index has a bigger impact.
- Current Account: Tuesday, 22:45. This quarterly indicator, wider than the higher frequency trade balance, has shown a surplus in Q1 2016: 1.31 billion. It came after 3 quarters of deficits. A return to negative ground could be seen now.
- Business NZ Manufacturing Index: Wednesday, 22:30. Manufacturing is growing quite nicely according to this gauge of the sector, which has a PMI-like scale. A score of 55.8 points was seen in August.
- GDP: Wednesday, 22:45. Like with many indicators coming out of New Zealand, there is only a sole quarterly publication. In the last 3 quarters, economic growth beat expectations. In Q1, the economy grew by 0.7% q/q. A slightly more moderate growth rate is likely now.
NZD/USD Technical Analysis
Kiwi/dollar made an attempt to rise above resistance at 0.7330 mentioned last week but fell back down.
Technical lines, from top to bottom:
We start from a higher point this time. 0.7740 is the high watermark that capped the pair back in April 2015. It is followed by the round level of 0.76. 0.7460 is the high level seen in September 2016.
