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NZD/USD weekly outlook: December 8 - 12
The New Zealand dollar fell to a four-week low against its U.S. counterpart on Friday, as stronger than forecast U.S. nonfarm payrolls data bolstered bets that the Federal Reserve will begin to raise rates sooner than previously thought.
NZD/USD hit 0.7700 on Friday, the pair's lowest since November 7, before subsequently consolidating at 0.7715 by close of trade on Friday, down 0.86% for the day and 1.61% lower for the week.
The pair is likely to find support at 0.7659, the low from November 7, and resistance at 0.7821, the high from December 4.
The U.S. dollar rallied after the Department of Labor said that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.
October’s figure was revised up to 243,000 from a previously reported 214,000, while the unemployment rate remained unchanged at a six-year low of 5.8%.
The upbeat data added to the view that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner than markets are expecting.
The US dollar index, which measures the greenback against a basket of six major currencies, hit a peak of 89.50, the strongest level since March 2009 and ended the day up 0.82% to 89.39.
In the week ahead investors will be awaiting Thursday's U.S. data on retail sales and jobless claims and Friday’s report on consumer sentiment for further indications on the strength of the economic recovery.
A policy decision by the Reserve Bank of New Zealand on Wednesday will also be in focus.
Meanwhile, China is to produce what will be closely watched reports on trade, consumer prices and industrial production in the week ahead. The Asian nation is New Zealand's second-largest trade partner.
Monday, December 8
- China is to publish data on the trade balance, the difference in value between imports and exports.
Wednesday, December 10- China is to publish data on the consumer price index.
- Later in the day, the Reserve Bank of New Zealand is to
announce its benchmark interest rate and publish its rate statement,
which outlines economic conditions and the factors affecting the
monetary policy decision. The announcement is to be followed by a press
conference.
Thursday, December 11- RBNZ
Governor Graeme Wheeler is to testify before the Finance and Expenditure
Select Committee in Wellington. His comments will be closely watched.
- The U.S. is to release data on retail sales, the government
measure of consumer spending, as well as the weekly report on jobless
claims.
Friday, December 12EURUSD weekly outlook: December 8 - 12
The euro dropped to two-year lows against the dollar on Friday after the U.S. nonfarm payrolls report for November showed that the U.S economy added jobs at the fastest rate in nearly three years, highlighting the diverging recovery in the U.S. and the euro zone.
The Labor Department reported that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.
September’s figure was revised up to 243,000 from a previously reported 214,000 and the unemployment rate remained unchanged at a six-year low of 5.8%.
The report also showed that average hourly earnings rose by a larger than forecast 0.4% and were 2.1% higher on a year-over-year basis.
EUR/USD fell to two-year lows of 1.2272 and settled at 1.2281, off 0.78% for the day. For the week, the pair was down 1.24%.
The unusually strong jobs report prompted markets to bring forward expectations for the first hike in U.S. interest rates to mid-2015 from September 2015 ahead of the data.
The euro had moved broadly higher on Thursday after European Central Bank President Mario Draghi indicated that it would not embark on quantitative easing for now, saying the bank would reassess its stimulus program in the first quarter of 2015.
He said the bank could potentially change the size, scale and composition of its existing stimulus programs and added that governing council remained unanimous that it would take further measures if needed.
The ECB also substantially revised down its forecasts for growth and inflation and warned that the latest forecasts do not take into account the recent steep drop in oil prices.
The bank now expects the euro zone economy to grow by just 0.8% this year, 1.0% in 2015 and 1.5% in 2016. It cut its inflation forecast for this year to just 0.5% from 0.6% and to 0.7% in 2015 from 1.1%.
The euro rose to six-year highs against the yen on Friday, with EUR/JPY at 149.23 in late trade.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, hit a peak of 89.50, the strongest level since March 2009 and ended the day up 0.82% to 89.39.
In the week ahead investors will be awaiting Thursday data on U.S. retail sales and jobless claims and Friday’s report on consumer sentiment for further indications on the strength of the economic recovery.
The euro zone economic calendar is light, with no major economic reports scheduled for release except for Friday’s report on industrial production.
Monday, December 8
- Germany is to
publish data on industrial production while research group Sentix is to
publish a report on euro zone investor confidence. Meanwhile, the
Eurogroup of finance ministers are to meet in Brussels.
Tuesday, December 9- Germany is to publish data on the trade balance.
Wednesday, December 10- France is to publish data industrial production.
Thursday, December 11- The U.S. is
to release data on retail sales, the government measure of consumer
spending, as well as the weekly report on jobless claims.
Friday, December 12NZD/USD forecast for the week of November 8, 2014, Technical Analysis (based on fxempire article)
The NZD/USD pair tried to rally during the course of the week, and as a result we turned back around and fell rather hard. We tested the 0.77 level, which of course was a significant support barrier. With that, we feel that a break down below the recent lows would be a reason to start selling the New Zealand dollar again, as the Royal Bank of New Zealand continues to work against the value of the Kiwi dollar. After all, they have recently suggested that this pair should be down to the 0.68 level. With that being the case, we feel that the central bank out of Wellington will continue to favor a weaker New Zealand dollar, as they have not only express their opinion verbally, but they have actually stepped into the market in order to sell.
Any rally at this point in time should continue to show weakness eventually. The 0.80 level continues to be the “ceiling” in this market, as it has been so reliable for the sellers recently. Ultimately, we believe the 0.75 level should be tested first, and then possibly down to the 0.70 level. Whether or not we can get down to the 0.68 level is of course a completely different conversation altogether. Ultimately, this should be one of those markets you can sell every time it rallies as the New Zealand dollar certainly is overvalued and is so highly influenced by the commodity markets. The commodity markets look horrible in general, and as a result the US dollar should continue to be favored overall, giving us a bit of a “one-way trade” going forward.
The market has been reliable for some time, and the market consolidating was simply the sellers taking a breather in our opinion. Quite often, you will see markets make impulsive moves like we did a couple of months ago, and then simply grind sideways. Eventually, and the trend continues and we think that’s about to happen going forward in this marketplace. It doesn’t mean they’re ready to go lower yet, but if we make a fresh new low that’s reason enough for us to start selling.
EUR/USD forecast for the week of December 8, 2014, Technical Analysis (based on fxempire article)
The EUR/USD pair initially tried to rally during the course of the week, but found the 1.25 level to be far too resistive. That being the case, the market fell rather hard. However, we believe that there is still more downtrend left in this market, and we had to the 1.2050 level. Ultimately, we believe that you cannot buy this market, and it is not until we get above the 1.30 level that we would even consider buying. Obviously, that’s not going to happen anytime soon as there is still plenty of bearish pressure.
EUR/USD Technical Analysis: Wedge Pattern Hints at Bounce (based on dailyfx article)
The Euro may be preparing to rebound against the US Dollar as prices carve out a bullish Falling Wedge chart formation. A daily close above the 1.2360-86 area marked by the 14.6% Fibonacci expansion and the November 21 close exposes the wedge top at 1.2440. Alternatively, a reversal below the 1.2213-38 zone (wedge floor, 23.6% level) opens the door for a challenge of the 38.2% Fib at 1.1974.
NZD/USD Technical Analysis: Clearing Path Below 0.76 Mark? (based on dailyfx article)
The New Zealand Dollar is attempting to accelerate downward in a bid to clear a path below the 0.76 figure against its US counterpart. Near-term support is in the 0.7659-96 area, marked by the November 7 low and the 23.6% Fibonacci expansion, with a break below that on a daily closing basis exposingthe 38.2% level at 0.7525.Alternatively, a reversal above the14.6% Fib at 0.7802clears the way for a challange of the 23.6% Fib retracement at 0.7937.
Weekend Edition with John O'Donnell (based on fxstreet article)
So many major things happening around the world that are having a significant impact on our markets! John O’Donnell joins Merlin Rothfeld for a look at Global Debt, Commodity prices, the equity market bubble, consumer credit, and a potential market crash!
Forum on trading, automated trading systems and testing trading strategies
Something Interesting in Financial Video December 2014
newdigital, 2014.12.09 06:06
EUR/USD slumps, USD/JPY jumps, Crude slides as USD advances post NFPVideo: Another Fundamental Theme Threatens to Drive Euro Lower (based on dailyfx article)
Can EURUSD break below 1.2200 before the year closes? The natural liquidity drain expected of the final weeks of the trading year works against such significant change. However, a strong fundamental driver can overwhelm the stand often taken by the remaining market participants and even draw those on vacation back to their terminals. For the Euro, there are multiple avenues of concern. The ECB's stimulus efforts have proven a key driver to this point, but the decision on a full-scale QE program seems to have been pushed back to 2015. However, two other lesser-appreciated critical themes are starting to stir. The implications of capital flight in the event of global risk aversion is still a difficult threshold to cross. Alternatively, a revived Euro-area financial fear between rising bond yields, struggling economies and austerity standoffs looks to be unfolding. In today's Strategy Video, we take a look at the Euro and what it would take to catalyze the next big leg for the currency...even before year end.
NZD/USD higher but gains seen limited (based on nasdaq article)
The New Zealand dollar was higher against its U.S. counterpart on Wednesday, but gains were expected to remain limited by sustained support for the greenback and as markets eyed the Reserve Bank of New Zealand's upcoming policy statement.
NZD/USD hit 0.7728 during late Asian trade, the session high; the pair subsequently consolidated at 0.7697, rising 0.25%.
The pair was likely to find support at 0.7606, Tuesday's low and a two-and-a-half year low and resistance at 0.7788, the high of December 5.