NZD/USD - Kiwi Steady At Start Of Week

|
Includes: AUNZ, UDN, UUP
by: Dean Popplewell

By Kenny Fisher

NZD/USD has posted small gains on Monday, as the pair trades at 0.6840 in the European session. It’s a quiet start to the week, with no economic releases from New Zealand or the US. Still, there are some cues for the markets. US Treasury Secretary Jack Lew will speak at an event in Washington. FOMC member William Dudley will deliver remarks at an event in New York, and the Federal Reserve will release a statement concerning the discount rates to be charged to Federal Reserve Banks.

On Thursday, with the markets still digesting the Fed’s dovish minutes, New York Federal Reserve president William Dudley stated that the Fed needed to approach future rate hikes with caution. Dudley reiterated Fed chair Yellen’s recent comments that although domestic growth was steady, the US economy remained prone to risks due to turbulent conditions in the global economy. Yellen’s dovish statements have dampened speculation about an April rate hike, which had been stoked by recent hawkish statements from several Fed officials. The Fed minutes showed strong differences of opinion among policymakers, with some members in favor of an April hike. As well,there was a split amongst members as to whether the recent pickup in inflation was sustainable. Many Fed members were worried about the lack of options available to the Fed since rates remain close to zero. This concern can have significant impact on the currency markets, since the dollar could strengthen if the Fed is unable to implement effective easing measures. What’s next from the Fed? A rate hike in April is highly unlikely, and a move in June will depend on economic data, in particular employment and inflation numbers.

New Zealand will release the Food Price Index on Tuesday. The indicator helps analysts track inflation, as CPI, the primary consumer inflation indicator, is released on a quarterly basis. FPI is pointing to weak inflation levels, as the index has posted six declines in the past seven readings. Will the index return to positive territory in the March report? We’ll get a look at CPI next week. The fourth quarter reading did not impress, with a decline of 0.5%, its worst reading since 2009.

NZD/USD Fundamentals

Monday (April 11)

  • 8:30 US Treasury Secretary Jack Lew Speaks
  • 9:25 US FOMC Member William Dudley Speaks
  • Tentative – Federal Reserve Announcement

*Key releases are highlighted in bold

*All release times are DST

NZD/USD for Monday, April 11, 2016

NZD/USD April 11 at 8:15 DST

Open: 0.6815 Low: 0.6788 High: 0.6844 Close: 0.6833

NZD/USD Technical

S3 S2 S1 R1 R2 R3
0.6449 0.6605 0.6738 0.6897 0.7011 0.7100
Click to enlarge
  • NZD/USD has posted slight gains in the Asian and European sessions
  • There is resistance at 0.6897
  • 0.6738 is providing strong support

Further levels in both directions:

  • Below: 0.6738, 0.6605 and 0.6449
  • Above: 0.6897, 0.7011, 0.7100 and 0.7231
  • Current Range: 0.6738 to 0.6897

OANDA’s Open Positions Ratio

The NZD/USD ratio is showing long positions with a strong majority (63%). This is indicative of trader bias towards NZD/USD continuing to move to higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.