NZD/USD : Levels, Ranges, Targets, RBNZ
New Zealand House prices lacks adequate supply, Commodities and exchange rates misaligned, Dairy exports below export break even rates, the why is found in the same old lingering effects in New Zealand and its Trade Ables to Non Trade Ables and then the follow on problem of Import to Export prices. All are directly related to the high exchange rate and why the need to lower NZ is now a deep economic concern. When Trade Ables and Imports to Exports are mentioned in the statement, the exchange rate problem becomes the focus because this combination lies at the heart of New Zealand's monetary and economic system.
Despite the loud and clear signal to lower OCR and failure to do so is seen in the misalignment of the 2 and 5 year yields. For the next 6 weeks of the reporting period, watch the 2 and 5 year yields to lower NZD and watch the 10 year act as the resistance. Rather than lower OCR and execute such a heavy handed decision, the market will perform the task to lower NZD for the RBNZ. Should this scenario fail and I don'r believe it will then the RBNZ's hand will be forced to lower at the next meeting. Dairy exports below break even rates is enough to inform how vital it is to lower NZD.
The short term conundrum in NZD is current price remains flat on the floor, same as yesterday and why NZD skyrocketed higher. The two driving pairs associated to NZD/USD are NZD/CAD and EUR/NZD, NZD/EUR.
NZD/USD. Bottom 0.7097 and achieves target by breaks lower at 0.7124 and 0.7115.
Upper targets 0.7176, 0.7159 and 0.7142. The cluster area in NZD is 0.7137 to 0.7140 then comes 0.7149, and 0.7163.
Points below are found at 0.7101, 0.7090, 0.7086, 0.7079, and big break at 0.7024. This point at 0.7101 and 0.7024 will be vital in coming days.
Range breaks above are found at 0.7242 and 0.7267. Below range breaks 0.7001 and 0.7024.