NZDUSD Technical Analysis 2014, 11.05 - 18.05: Correction or Ranging?
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newdigital, 2014.05.10 08:13
Forex Fundamentals - Weekly Outlook May 12-16US Federal Budget Balance, retail sales, inflation and employment data, Philly Fed Manufacturing Index and Prelim UoM Consumer Sentiment are the main events on Forex calendar. Here is an outlook on the highlights of this week.
Last week, Fed Chair Janet Yellen testified before the US Congress repeating her speech made earlier before the Joint Economic Committee. Yellen noted the economy is on track for solid growth and that accommodative policy will continue as long as required. The Fed will normalize interest rates when the economy improves. Yellen believes US balance sheet will return to normal in 5 to 8 years. However, despite the positive tone, there were some troubled spots such as the Russia-Ukraine conflict and the recent setback in the housing market imposing on the ongoing economic recovery. Will the positive note continue in the coming weeks?
Let’s start,
- US Federal Budget Balance: Monday, 18:00. US budget debt narrowed more than expected in in March, reaching $36.9 billion, following $193.5 billion posted in February. Analysts expected a more modest decline to $76.5 billion. The overall trend is positive with a rise in receipts led by 11% fiscal year-to-date increase in corporate taxes and a 7 percent increase in individual taxes and the spending side is coming down including a 6% decline in defense spending. US Budget Balance is expected to reach a surplus of $112.6 billion.
- German ZEW Economic Sentiment: Tuesday, 9:00. German investor confidence continued to slide in April reaching 43.2 after posting 46.6 in March. Despite the strong recovery in the first quarter, the six month outlook survey revealed growing concerns about the Russia-Ukraine crisis and its possible effects on manufacturers and exporters in Germany. German investor confidence is expected to continue its downward trend towards 41.3.
- US retail sales: Tuesday, 12:30. U.S. retail sales surged to a 1-1/2 –year high of 1.1% in March indicating strong recovery in the US economy after a sluggish winter. The increase was evident in all sectors and followed a 0.7% gain in February. Meanwhile Core sales, excluding automobiles edged up 0.7%, the biggest rise in a year. These impressive figures raised new hopes for a boost in growth this year. U.S. retail sales are expected to climb 0.5%, while core sales are expected to increase 0.6%.
- UK employment data: Wednesday, 8:30. The number people claiming jobless benefits in March declined by 30,400 reaching to 1.14 million after a 37,000 drop in the previous month, indicating an ongoing improvement in Britain’s labor market. The unemployment rate also improved to 6.9% from 7.2% in February. Average earnings in the three months to February increased by 1.7% compared with a year earlier. Chancellor of the Exchequer, George Osborne, hailed the “strong jobs numbers” as further evidence that the coalition government’s economic plan is working. The number of jobless aid seekers are expected to decline further by 31,200 pushing the unemployment rate down to 6.8%.
- Mark Carney speaks: Wednesday, 9:30. Mark Carney, the Governor of the Bank of England will speak in a press conference, together with other MPC members, about the Inflation Report, in London. Carney stated in March that the Bank’s 2% inflation target became ‘dangerous distraction’ for the UK’s policymakers veiling the true progress made in the UK’s economy. Market volatility is expected.
- US PPI: Wednesday, 12:30. U.S. producer prices edged up 0.5% in March, posting their largest increase in nine months, amid a rise in the cost of food and trade services. The increase was well above market consensus following a 0.1% fall in February. The unexpected rise may be explained by weather related factors, but the wholesale inflation is expected to settle down in April. U.S. producer prices are expected to climb 0.2% this time.
- Haruhiko Kuroda speaks: Thursday, 4:25. BOJ Governor Haruhiko Kuroda will speak in Tokyo. Market volatility may occur.
- US inflation data: Thursday, 12:30. U.S. consumer prices increased slightly more than expected in March, rising 0.2% after a 0.1% climb in the previous month, suggesting inflation is back. In the 12 months through March, consumer prices rose 1.5% after increasing 1.1% over the 12 months through February. Meanwhile, core CPI, excluding volatile energy and food components, also edged up 0.2% in March after rising 0.1% in the prior month. The central bank is expected to end the QE bond purchases later this year. Domestic demand and the labor markets are improving but a rate hike is not expected before the second half of 2015. U.S. consumer prices are expected to increase by 0.3%, while core CPI is predicted to climb 0.2%.
- US Unemployment Claims: Thursday, 12:30. The number of new claims for unemployment aid filed last week fell 26,000 to 319,000, indicating the setback seen in the Easter holiday was temporary and the US job market is regaining its strength. Despite the drop in the number of applications. The four-week average increased by 4,500, to a seasonally adjusted 324,750 due to temporary layoffs around the Easter holiday but it is far better than the 343,000 average for 2013. Jobless claims is expected to rise to 321,000.
- US Philly Fed Manufacturing Index: Thursday, 14:00. Factory activity in the U.S. mid-Atlantic region increased in April to 16.6 from 9.0 in March beating market forecast of a 9.6 reading. New orders edged up to 14.8, the highest level since October, from 5.7. The employment component improved to 6.9 from 1.7, but business conditions for the next six months fell to 26.6 from 35.4. Overall, the survey shows positive growth prospects for the US economy in the coming months. Factory activity in the Philadelphia area is anticipated to decline to13.9.
- Janet Yellen speaks: Thursday, 23:00. Federal Reserve Chair Janet Yellen will speak in Washington DC at the National Small Business Week. Yellen may talk about her latest testimony at the US congress. Market volatility is expected.
- US Building Permits: Friday, 12:30. US building permits fell by 2.4% in March reaching an annualized rate of 990,000.The reading suggests the pace of starts will increase further in the coming months. Single-family starts increased 0.2% compared to the previous year. Economists expect an acceleration in housing construction based on stronger household construction later this year and in 2015. US building permits are expected expand to an annualized rate of 1.01 million.
- US Prelim UoM Consumer Sentiment: Friday, 13:55. Consumer confidence strengthened in April to the highest level since July, rising to 82.6 compared to 80 in March. Improvement in the US labor market contributed to this rise. The reading was better than the 81.2 projected by analysts. Increased employment opportunities and better wages will continue to lift consumer spending as well as consumer sentiment. Consumer confidence is expected to improve further to 84.7.
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newdigital, 2014.05.12 11:10
2014-05-12 08:05 GMT (or 10:05 MQ MT5 time) | [CNY - New Loans]
- past data is 1050B
- forecast data is 840B
- actual data is 775B according to the latest press release
if actual > forecast = good for currency (for CNY in our case)
CNY New Loans = Value of new yuan-denominated loans issued to consumers and businesses during the previous month
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NZDUSD M5 : 15 pips price movement by CNY - New Loans news event
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newdigital, 2014.05.10 15:22
NZD/USD forecast for the week of May 12, 2014, Technical AnalysisThe NZD/USD pair tried to rally over the course of the week, but as you can see struggle that the 88 level. The market fell back down and formed a shooting star, which of course is very bearish. Nonetheless, it appears that we are still within consolidation, and we feel that the “floor” in this market is at the 0.85 handle, so thereby making this a market that’s probably not can it be able to be traded from a longer-term perspective quite yet. However, we would be buyers near 0.85 off of the daily chart and supportive action.
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newdigital, 2014.05.13 08:36
2014-05-13 05:30 GMT (or 07:30 MQ MT5 time) | [CNY - Industrial Production]
- past data is 8.8%
- forecast data is 8.9%
- actual data is 8.7% according to the latest press release
if actual > forecast = good for currency (for CNY in our case)
CNY Industrial Production = Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities
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China's Industrial Output, Retail Sales Growth Weaker Than Forecasts
China's industrial production growth eased unexpectedly in April, data showed Tuesday. Retail sales also expanded at a slower pace in April.
Industrial production grew 8.7 percent year-on-year in April, which was slightly slower than the 8.8 percent rise seen in March, the National Bureau of Statistics said. Production was forecast to rise by 8.9 percent.
Retail sales advanced 11.9 percent in April from a year ago, while the growth was forecast to remain unchanged at 12.2 percent.
During January to April, fixed asset investment increased 17.3 percent compared to 17.6 percent growth logged during January to March and expectations for 17.7 percent rise.
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NZDUSD M5 : 8 pips price movement by CNY - Industrial Production news event
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newdigital, 2014.05.13 14:55
2014-05-13 12:30 GMT (or 14:30 MQ MT5 time) | [USD - Retail Sales]
- past data is 1.5%
- forecast data is 0.4%
- actual data is 0.1% according to the latest press release
if actual > forecast = good for currency (for USD in our case)
USD - Retail Sales = Change in the total value of sales at the retail level
==========
U.S. Retail Sales Rise Less Than Expected In April
After reporting a sharp increase in U.S. retail sales in the previous month, the Commerce Department released a report on Tuesday showing that retail sales inched up by less than expected in the month of April.
The report said retail sales edged up by 0.1 percent in April following an upwardly revised 1.5 percent jump in March.
Economists had expected sales to rise by about 0.4 percent compared to the 1.1 percent growth originally reported for the previous month.
Excluding an increase in sales by motor vehicle and parts dealers, retail sales came in unchanged in April compared to a 1.0 percent increase in March. Ex-auto sales had been expected to climb by 0.6 percent.
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NZDUSD M5 : 18 pips price movement by USD - Retail Sales news event
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newdigital, 2014.05.11 16:22
NZD/USD Fundamentals - weekly outlook: May 12 - 16The New Zealand dollar fell to a one-week low against its U.S. counterpart on Friday, following comments from Reserve Bank of New Zealand Deputy Governor Grant Spencer.
NZD/USD hit 0.8603 on Friday, the pair’s lowest since May 2, before subsequently consolidating at 0.8612 by close of trade, down 0.4% for the day and 0.6% lower for the week.
The pair is likely to find support at 0.8591, the low from May 2 and resistance at 0.8670, the high from May 8.
RBNZ Deputy Governor Spencer said Friday that the high exchange rate is a cause for concern. He added that housing market prices and the exchange rate are important variables for the pace and timing of interest rate hikes.
"A big uncertainty is the future path of the exchange rate, which has a major bearing on traded goods prices and overall economic activity," he said. "The more downward pressure that the exchange rate exerts on prices and activity, the less pressure will need to be exerted by interest rates."
The RBNZ has raised the official cash rate by 25 basis points twice since March to 3.00% now.
On Wednesday, RBNZ Governor Graeme Wheeler warned against the Kiwi's current strength, saying that "it would become more opportune for the Reserve Bank to intervene in the currency market to sell New Zealand dollars", in the face of worsening fundamentals.
In addition, official data showed that the number of employed people in New Zealand rose by 0.9% in the first quarter, beating expectations for a 0.6% increase, after a 1.1% gain in the three months to December.
The report also showed that New Zealand's unemployment rate remained unchanged at 6.0% in the last quarter, disappointing expectations for a downtick to 5.9%.
Meanwhile, the greenback remained under pressure after Federal Reserve Chair Janet Yellen said Wednesday that a high degree of monetary accommodation remains warranted given the slack in the economy.
Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the New Zealand dollar in the week ending May 6.
Net longs totaled 20,693 contracts as of last week, compared to net longs of 18,480 contracts in the previous week.
In the week ahead, investors will be looking to U.S. data on retail sales, consumer prices and consumer sentiment for further indications on the strength of the economy and the need for stimulus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 12
- The U.S. is to publish data on the federal budget balance.
- China is to release data on industrial production and fixed asset investment. The Asian nation is New Zealand’s second largest trade partner.
- The U.S. is to produce data on retail sales, as well as reports on import prices and business inventories.
- The RBNZ is to publish its bi-annual financial stability report. Governor Graeme Wheeler is to hold a press conference to discuss the report. Meanwhile New Zealand is to release data on retail sales.
- Later Wednesday, the U.S. is to release data on producer price inflation.
- New Zealand is to release its annual budget statement, as well as private sector data on manufacturing activity.
- The U.S. is to release data on initial jobless claims, consumer inflation and industrial production, as well as a report on manufacturing activity in the Philadelphia region.
- The U.S. is to round up the week with reports on building permits and housing starts, and a preliminary reading on consumer sentiment from the University of Michigan.
The situation in my opinion is as follows:
1. During the current year, this pair will rise even higher
2. Now scheduled rollback in the amount of quarterly zone. Strayed from the annual level (which was partially recorded profits of large players)
3. A further area at the annual traders to go down on a quarterly screenshot shows. Overall a month or two should recheck. 
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newdigital, 2014.05.14 07:17
NZDUSD Technical Analysis (adapted from dailyfx article)
- NZD/USD Technical Strategy: Flat
- Support: 0.8607 (23.6% Fib ret.), 0.8500-13 (38.2% Fib ret., Oct 22 close)
- Resistance: 0.8745 (Apr 10 high)
Prices are too close to relevant support to justify a short position from a risk/reward perspective. We will remain on the sidelines for now, waiting for a more actionable trade setup to present itself.
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newdigital, 2014.05.14 15:18
2014-05-14 12:30 GMT (or 14:30 MQ MT5 time) | [USD - PPI]
- past data is 0.5%
- forecast data is 0.2%
- actual data is 0.6% according to the latest press release
if actual > forecast = good for currency (for USD in our case)
USD PPI = Change in the price of finished goods and services sold by producers
==========
U.S. Producer Prices Rise More Than Expected In April
Producer prices rose by much more than anticipated in the month of April, according to a report released by the Labor Department on Wednesday, with the increase partly due to a sharp jump in food prices.
The Labor Department said its producer price index for final demand rose by 0.6 percent in April following a 0.5 percent increase in March. Economists had been expecting producer prices to edge up by about 0.2 percent.
Core producer prices, which exclude food and energy, also showed continued growth, climbing by 0.5 percent in April after rising by 0.6 percent in March. Core prices had been expected to rise by 0.2 percent.
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NZDUSD M5 : 16 pips price movement by USD - PPI news event
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D1 price is on secondary correction within primary bullish - price is still above Sinkou Span A line (which may be virtual border between bullish and bearish on D1 chart). Besides, Chinkou Span line of Ichimoku indicator came to be very close to historical price for future possible breakdown of the price movement up to the border of Ichimoku cloud/kumo.
H4 price broke Sinkou Span A line on close bar and came to bearish zone which is indicating the reversal of the price movement from primary bullish to bearish market condition. But Ichimoku kumo is very thin one and H4 price may be reversed back to bullish anytime with this H4 intra-day timeframe.
W1 price is on bullish flat for the 5th week.
If D1 price will break 0.8591 resistance together with Chinkou Span line to be crossed with the price from above to below - we will see the secondary correction to be continuing with good possibility for price reversal to the bearish.If not so we may see the ranging market condition within primary bullish.
UPCOMING EVENTS (high/medium impacted news events which may be affected on NZDUSD price movement for this coming week)
2014-05-12 22:45 GMT (or 00:45 MQ MT5 time) | [NZD - FPI]
2014-05-13 05:30 GMT (or 07:30 MQ MT5 time) | [CNY - Industrial Production]
2014-05-13 12:30 GMT (or 14:30 MQ MT5 time) | [USD - Retail Sales]
2014-05-13 22:45 GMT (or 00:45 MQ MT5 time) | [NZD - Retail Sales]
2014-05-14 22:30 GMT (or 00:30 MQ MT5 time) | [NZD - Business NZ Manufacturing Index]
2014-05-15 23:00 GMT (or 01:00 MQ MT5 time) | [USD - Fed Chair Yellen Speaks]
Please note : some US (and CNY) high/medium impacted news events (incl speeches) are also affected on NZDUSD price movementSUMMARY : bullish
TREND : correction
Intraday Chart
