Is the weakness of the New Zealand Dollar, is only the beginning of a long journey down to lower destinations

New Zealand Dollar Technical Analysis Forecast

Friday’s nonfarm payrolls will yield the usual influence on forex markets as investors look to this key data for an indication of the future path of monetary policy in the US. 
Figures for March were a big disappointment – 98,000 was well below the recent average. However, so far that has not dissuaded the market from thinking the Fed will probably hike rates again at its June meeting. 
Ahead of the NFP figures, there is the Federal Open Market Committee (FOMC) meeting on Wednesday. Markets do not expect this to be a live meeting, with CME Group’s Fed Watch tool indicating just a 5% chance policymakers will raise rates this week. The consensus is for the next move higher to come in June, which places the emphasis for Treasury and currency markets on Friday’s NFP release.
Finance Minister Joyce gave a pre-Budget speech where he outlined a boost to infrastructure spending and would look to raise income tax thresholds.  The strength of NZ’s fiscal accounts would also enable further debt reduction, with a new medium-term target of net debt falling to 10-15% of GDP by 2025.
Next Reserve Bank’s schedule for the release of Monetary Policy Statements (MPS) and Official Cash Rate (OCR) announcements is going to be on 11 May 17

now what?
on the Technical side we can couple of things:

Pay attention to the pattern – it could be that we see here Gartley pattern’ this the situation so we should expect to see lower number below the last lows, while break above 0.7340-0.7460 could take him to 0.79 area
The NZD/USD might need to see further strength to move above the 0.7340-0.74400 resistance, which could indicate make new highs at 0.79 area; break below 0.6940+_ may expose what could be another step down below the previous lows key resistance area below the 0.6760 level

NZD/USD technical analysis

One more thing:
look on the  COT position map – there is growing on the short position on the kiwi, wonder if this reflect the continued move

NZD/USD analysis
NZD/USD position

This review does not including any document and / or file attached to it as an advice or recommendation to buy / sell securities and / or other advice

Leave a comment