NZDUSD Technical Analysis 2014, 13.07 - 20.07: Bullish
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newdigital, 2014.07.11 17:53
Forex Weekly Outlook July 14-18The yen managed to gain some ground in a week that saw some fear return to the markets. What’s next for currencies? Public appearances from Yellen, Draghi and Carney, rate decisions in Japan and Canada and plenty of important US figures are the highlights of a busy week. Market movers on our calendar for this week. Here is an outlook on the major events to change Forex trading.
Last week FOMC Meeting Minutes release showed that the Fed is finally moving towards preparing the markets for monetary normalization. The Fed is on course to end QE in October 2014, with a larger tapering of $15 billion. However there wasn’t any clear indication regarding the possible timeline for a rate hike. In the euro-zone, we had a flashback from the dark days of the debt crisis, with fresh worries from Portugal. The pound was capped amid some weak UK data. And both in Australia and in Canada, employment data weighed on the local currencies. Let’s start:
Updates:
- Mario Draghi speaks: Monday, 17:00. ECB President Mario Draghi is expected to testify before the Committee on Economic and Monetary Affairs of the European Parliament, in Strasbourg. He may talk on the ongoing weak inflation, despite the ECB’s recent moves. Volatility is expected, especially if Draghi refers to the exchange rate of the euro and to the probability of QE, a topic which is high on the agenda of policymakers.
- Japan rate decision: Tuesday. The Bank of Japan decided to keep monetary policy unchanged on its June meeting, pledging to increase monetary base at annual pace of 60-70 trillion yen. The central bank noted the economy is progressing at a moderate pace in line with expectations and revised up its outlook on overseas economies in light of a progress in industrial output.
- UK inflation data: Tuesday, 8:30. Inflation in the UK declined in May to a four and a half year low of 1.5%, following 1.8% in posted in April. Lower flight rates and food prices pushed inflation down. Inflation remained below the BOE’s 2% target for the sixth month. However prices still increase faster than average earnings influencing consumer spending. CPI is expected to reach 1.6%.
- Mark Carney speaks: Tuesday, 9:00. BOE Governor Mark Carney will speak about the Financial Stability in London. We have seen his strong influence on markets by talking about a rate hike at first and then saying the comments were his personal views.
- German ZEW Economic Sentiment: Tuesday, 9:00 Investor sentiment continued to decline in June reaching the lowest level in 18 months, down 3.3 points to 29.8. Economists expected the index to reach 35.2. This was the sixth consecutive fall indicating a grim outlook for economic growth unlike the 5.6 points rise to 67.7 for current economic conditions. However the ZEW survey can be volatile. German sentiment is expected to rise to 33.4.
- US retail sales: Tuesday, 12:30. U.S. retail sales gained 0.3% in May, less than the 0.5% rise projected by analysts, following a 0.5% increase in the previous month. However the positive growth trend in the US employment market leaves less room for concern. Meanwhile core sales, excluding autos increased 0.1% in May after a 0.4% increase in the previous month. Retail sales are expected to rise 0.6%.
- Janet Yellen speaks: Tuesday, 14:00. Federal Reserve Chair Janet Yellen will testify before the US Senate in Washington DC. Important issues may be raised such as the final taper decision, inflation situation and rate hike schedule. According to a top Fed watcher in the WSJ, the time may be ripe for Yellen and her colleagues to acknowledge the improvement in the US economy, especially as the Fed’s favorite job figure is clearly on the rise.
- UK employment data: Wednesday: 8:30. The number of people filing claims for unemployment benefits in the U.K dropped more than expected in May, falling by a seasonally adjusted 27,400, while the unemployment rate plunged to 6.6% from 6.8% in April. Analysts expected jobless claims to reach 25,000 and unemployment rate to 6.7%. Meanwhile, the average earnings index edged up by a seasonally adjusted 0.7% in the three months to April, less than the 1.2% increase projected, after rising by 1.9% in the three months to March. The number of Jobless people is expected to decline by 27,100 and the unemployment rate is expected to remain 6.6%
- US PPI : Wednesday, 12:30. Producer prices in the U.S. fell unexpectedly in May by 0.2%, confirming that inflation is mild. Chipper food and gas pushed PPI down after two strong climbs raising hopes for higher inflation figures. In the last 12 months, producer prices increased 2%, in line with the Federal Reserve’s inflation target following 2.1% in April. Core PPI, excluding food and energy products, remained unchanged in May. Producer prices are expected to rise to 0.4%.
- Canadian rate decision: Wednesday, 14:00. The Bank of Canada maintained its overnight rate at 1%. Inflation moved closer to the central bank’s target of 2%. The Canadian economy grew at a modest rate in the first quarter, troubled by by severe weather and supply constraints. However lower Canadian dollar and a rising foreign demand are expected to boost exports. Improved corporate profits, especially in exchange rate-sensitive sectors, should also support higher business investment in the coming quarters. The next change in monetary policy will depend on new information and its influence on the balance of risks. The BOC may be somewhat more dovish after the disappointing employment numbers.
- US Building Permits: Thursday, 12:30. The number of building permits issued in the U.S. declined more-than-expected in May, falling 6.4% to a seasonally adjusted 991,000 units. Analysts expected a rise to 1.07 million units. Meanwhile, housing starts declined 6.5% to a seasonally adjusted 1.001 million units from April’s total of 1.071 million, worse than the 3.7% drop predicted by analysts. The number of building permits is expected to reach 1.04 million this time.
- US Unemployment Claims: Thursday, 12:30. Initial jobless claims fell by 11,000 last week reaching 304,000, well below estimates of a 315,000 rise. The reading brought unemployment claims near to a seven-year low of 298,000. The four-week moving average, fell to 311,500, lower by 3,500 from the unrevised average of 315,000 in the previous week. The number of jobless claims is expected to rise by 310,000.
- US Philly Fed Manufacturing Index: Thursday, 14:00. The manufacturing sector around the Philadelphia region edged up in June, reaching 17.8, above May’s reading of 15.4. Economists expected the survey to reach 14.3. This was the fourth consecutive month in positive territory and the strongest figure since September. New orders expanded by 6 points to 16.8, new shipments increased to 15.5, following 14.2 in May and the employment index also edged up to 11.9, from May’s reading of 7.8. The positive shifts suggest the US manufacturing sector is picking up. The manufacturing sector in the Philadelphia area is expected to decline to 15.6.
- US UoM Consumer Sentiment: Friday, 13:55. U.S. consumer sentiment declined in June to 81.2 down from 81.9 posted in May, but the lower figure does not necessarily suggests a downside trend. Consumers were positive regarding the past six months. Current economic conditions edged up to 95.4 from 94.5 and was below a forecast of 95.7 and consumer expectations declined to 72.2 from 73.7, and missed an expected 74.6. Consumer sentiment is expected to rise to 83.5.
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newdigital, 2014.07.14 09:44
2014-07-13 22:03 GMT (or 00:03 MQ MT5 time) | [NZD - REINZ HPI]
- past data is -1.2%
- forecast data is n/a
- actual data is -0.3% according to the latest press release
if actual > forecast = good for currency (for NZD in our case)
[NZD - REINZ HPI] = Change in the selling price of all homes. It's a leading indicator of the housing industry's health because rising house prices attract investors and spur industry activity
Acro Expand = Real Estate Institute of New Zealand (REINZ), House Price Index (HPI).
==========
New Zealand Performance Of Services Index Rises To 54.7 In June
New Zealand's services sector expanded at an accelerated pace in June, the latest survey from Business New Zealand revealed on Monday - showing an index score of 54.7.
That's up from a downwardly revised 54.1 in May (originally 54.2).
A score above 50 signals expansion in a sector, while a reading below 50 means contraction.
Among the individual components of the survey, all five elements expanded, including supplier deliveries, new orders, stock inventories, sales and employment.
"Many economic indicators have been going gangbusters over the past 12 months, pointing to strong growth," Bank of New Zealand economist Doug Steel said. "More recently, there have been a few hinting at some degree of cooling, but to levels that are still above average."
NZDUSD M5 : 9 pips range price movement by NZD - REINZ HPI news event:
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newdigital, 2014.07.13 16:02
NZDUSD Fundamentals (based on dailyfx article)
Fundamental Forecast: Bullish- NZD/JPY Close Above 89.50 to Raise Scope for Higher-High
- Chinese CPI, PPI Figures Fail to Excite Currency Markets Overnight
The NZD/USD remains at risk of marking fresh record-highs ahead of the
next Reserve Bank of New Zealand (RBNZ) policy meeting on July 23 as
the economic docket is expected to show heightening price pressures
across the region.
Indeed, the headline reading for New Zealand inflation is expected to
increase an annualized 1.8% in the second-quarter, which would mark the
fastest pace of growth since the last three-months of 2011, and
heightening price pressures may generate a further advance in the
exchange rate as it fuels interest rate expectations. According to
Credit Suisse overnight index swaps, market participants are pricing a
90% chance for another 25bp rate hike in July, but we may see the RBNZ
take a more aggressive approach in normalizing monetary policy as the
stronger recovery raises the risk for inflation.
RBNZ Assistant Governor John McDermott warned that the central bank
will aim for ‘low and stable inflation’ as the central bank raises its
outlook for growth, and the stronger recovery should continue to
heighten the appeal of the New Zealand dollar, especially as Fitch
Ratings raising its credit rating outlook for the region. With that
said, the positive developments coming out of the region may continue
to limit the downside risk for the NZD/USD, and we may see the RBNZ do
little to halt the advance in the local currency as it helps the
central bank to achieve price stability.
As a result, we will retain a bullish outlook for the NZD/USD as it
approaches the 2011 high (0.8841), and we will continue to look for
opportunities to ‘buy dips’ ahead of the RBNZ interest rate decision
should the inflation report further boost interest rate expectations.
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newdigital, 2014.07.15 16:43
2014-07-15 14:00 GMT (or 16:00 MQ MT5 time) | [USD - Fed Chair Yellen Testifies]
- past data is n/a
- forecast data is n/a
- actual data is n/a according to the latest press release
[USD - Fed Chair Yellen Testifies] = Due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC. As head of the central bank, which controls short term interest rates, she has more influence over the nation's currency value than any other person. Traders scrutinize her public engagements as they are often used to drop subtle clues regarding future monetary policy
==========
4 top takeaways from Fed chair Janet Yellen’s testimony to Senate Banking Committee
YELLEN ON POLICY OUTLOOK
“In sum, since the February Monetary Policy Report, further important progress has been made in restoring the economy to health and in strengthening the financial system. Yet too many Americans remain unemployed, inflation remains below our longer-run objective, and not all of the necessary financial reform initiatives have been completed. The Federal Reserve remains committed to employing all of its resources and tools to achieve its macroeconomic objectives and to foster a stronger and more resilient financial system.”
YELLEN ON LABOR MARKET CONDITIONS
“The FOMC is committed to policies that promote maximum
employment and price stability, consistent with our dual mandate from
the Congress. Given the economic situation that I just described, we
judge that a high degree of monetary policy accommodation remains
appropriate.
Labor force participation appears weaker than one would expect based on
the aging of the population and the level of unemployment. These and
other indications that significant slack remains in labor markets are
corroborated by the continued slow pace of growth in most measures of
hourly compensation.”
YELLEN ON INFLATION
“Consistent with the anticipated further recovery in the labor market, and given that longer-term inflation expectations appear to be well anchored, we expect inflation to move back toward our 2% objective over coming years.”
YELLEN ON ECONOMIC GROWTH
“Although the decline in GDP in the first quarter led to some downgrading of our growth projections for this year, I and other FOMC participants continue to anticipate that economic activity will expand at a moderate pace over the next several years, supported by accommodative monetary policy, a waning drag from fiscal policy, the lagged effects of higher home prices and equity values, and strengthening foreign growth.”
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newdigital, 2014.07.15 19:34
Trading the News: New Zealand Consumer Price Index
- New Zealand Consumer Price Index (CPI) to Increase for First-Time in 2014.
- Headline Inflation of 1.8% Would Mark the Fastest Pace of Growth Since 4Q 2011.
Heightening price pressures in New Zealand may push the NZD/USD to fresh
record-highs as it puts increased pressure on the Reserve Bank of New
Zealand (RBNZ) to take a more aggressive approach in normalizing
monetary policy.
What’s Expected:
Why Is This Event Important:
Indeed, RBNZ Governor Glenn Stevens may sound increasingly hawkish at the July 23 policy meeting as the faster recovery raises the risk for inflation, and the central bank may do little to halt the ongoing appreciation in the local currency as it helps to achieve price stability.
Rising input prices along with the pickup in household confidence may encourage New Zealand firms to pass on higher costs, and a stronger-than-expected CPI print may heighten the bullish sentiment surrounding the kiwi as it fuels bets for additional rate hikes in the second-half of 2014.
Nevertheless, the headline reading for inflation may disappoint amid
subdued wage growth paired with the slowdown in private consumption, and
a dismal inflation print may spark a larger correction in the NZD/USD
as it drags on interest rate expectations.
How To Trade This Event Risk
Bullish NZD Trade: 2Q CPI Climbs 1.8% or Greater
- Need green, five-minute candle following the release to consider a long New Zealand dollar trade
- If market reaction favors buying sterling, go long NZD/USD with two separate position
- Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Move stop to entry on remaining position once initial target is hit, set reasonable limit
- Need red, five-minute candle to favor a short NZD/USD trade
- Implement same setup as the bullish New Zealand dollar trade, just in the opposite direction
NZD/USD Daily
- Outlook Remains Bullish as Price Continues to Carve Higher Highs & Lows
- Interim Resistance: 0.8841 (2011 High) to 0.8850 (61.8% expansion)
- Interim Support: 0.8600 (23.6% retracement) to 0.8630 (61.8% expansion)
| Period | Data Released | Estimate | Actual | Pips Change (1 Hour post event ) | Pips Change (End of Day post event) |
|---|---|---|---|---|---|
| 1Q 2014 | 04/15/2014 22:45 GMT | 1.7% | 1.5% | -36 | -10 |
The headline reading for New Zealand inflation unexpectedly slowed during the first three-months of 2014, with the CPI figure slipping to an annualized 1.5% from 1.6% in the fourth quarter. The New Zealand dollar struggled to hold its ground following the dismal print, with the NZD/USD moving back below the 0.8600 handle, but the higher-yielding currency pared the losses during the North American trade to close at 0.8622.
NZDUSD M5 : 46 pips price movement by NZD - CPI news event :
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newdigital, 2014.07.16 08:46
NZ Dollar Falls on CPI Miss, Aussie Dollar Down After China GDP Data
- NZ Dollar Falls on CPI Miss, Aussie Dollar Down After Chinese GDP
- British Pound May Not Find Direction in June’s Jobless Claims Data
- US Dollar Eyes Yellen Testimony for Direction Guidance Once Again
The New Zealand Dollar underperformed in overnight trade, sliding as much as 0.7 percent on average against its leading counterparts. The move followed softer-than-expected CPI figures for the second quarter. The baseline year-on-year inflation rate registered at 1.6 percent, falling short of consensus forecasts calling for a 1.8 percent result. That seemingly undermined RBNZ rate hike expectations, with the slide in the Kiwi tracking a parallel move lower in the New Zealand’s benchmark 10-year bond yield.
The Australian Dollar likewise traded lower, losing as much as 0.24 percent against the majors. Curiously, the move followed an upbeat set of Chinese GDP figures. Output grew 2.0 percent in the second quarter, topping bets calling for a 1.8 percent increase. Supportive Chinese data might have been expected to boost the Aussie considering the East Asian giant is Australia’s top trading partner, meaning firming performance there bodes for the latter country’s pivotal export sector.
The newswires chalked up this apparent disparity to concerns that the Chinese economy’s recovery was unsustainable, suggesting seemingly sharp credit expansion rather than hard growth is behind the rosy headline GDP reading. Fading stimulus expansion bets were likewise cited, with investors apparently worried that the second-quarter data set will discourage further expansionary policy. Needless to say, it is all but impossible to tell with absolute certainty why the markets were unimpressed and the Aussie fell. In any case, we remain short AUDUSD.
June’s UK Jobless Claims figures headline the economic calendar in European hours. Expectations call for a 27,000 drop in new applications for unemployment benefits, which would mark the smallest drawdown in 13 months. Absent a dramatic deviation from expectations, the outcome may pass with little fanfare considering its relatively limited implications for BOE monetary policy bets and thereby for the British Pound. Meanwhile, technical positioning warns GBPUSD may be carving out a top below the 1.72 figure.
The spotlight then shifts to US policy concerns as Fed Chair Janet Yellen testifies before Congress for a second day, this time appearing before the House of Representatives having talked to the Senate yesterday. The central bank chief’s prepared remarks are likely to sound familiar and offer little impetus for volatility. The Q&A session that follows might produce some fireworks if lawmakers manage to squeeze out anything about the likely timing of interest rate hikes however, prompting a response from the US Dollar.
Asia Session
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|---|---|---|---|---|---|
|
22:45 |
NZD |
Consumer Prices Index (QoQ) (2Q) |
0.3% |
0.4% |
0.3% |
|
0:30 |
AUD |
Westpac Leading Index (MoM) (JUN) |
0.1% |
- |
0.1% |
|
2:00 |
CNY |
GDP (QoQ) (2Q) |
2.0% |
1.8% |
1.5% |
|
2:00 |
CNY |
GDP (YoY) (2Q) |
7.5% |
7.4% |
7.4% |
|
2:00 |
CNY |
GDP YTD (YoY) (2Q) |
7.4% |
7.4% |
7.4% |
|
2:00 |
CNY |
Retail Sales (YoY) (JUN) |
12.4% |
12.5% |
12.5% |
|
2:00 |
CNY |
Retail Sales YTD (YoY) (JUN) |
12.1% |
12.2% |
12.1% |
|
2:00 |
CNY |
Industrial Production (YoY) (JUN) |
9.2% |
9.0% |
8.8% |
|
2:00 |
CNY |
Industrial Production YTD (YoY) (JUN) |
8.8% |
8.8% |
8.7% |
|
2:00 |
CNY |
Fixed Assets Ex Rural YTD (YoY) (JUN) |
17.3% |
17.2% |
17.2% |
European Session
|
8:30 |
GBP |
Jobless Claims Change (JUN) |
-27.0K |
-27.4K |
High |
|
8:30 |
GBP |
Claimant Count Rate (JUN) |
3.1% |
3.2% |
Medium |
|
8:30 |
GBP |
ILO Unemployment Rate (3Mths) (MAY) |
6.5% |
6.6% |
Medium |
|
8:30 |
GBP |
Employment Change (3M/3M) (MAY) |
243K |
345K |
Low |
|
8:30 |
GBP |
Avg Weekly Earnings (3M/(YoY) (MAY) |
0.5% |
0.7% |
Low |
|
8:30 |
GBP |
Weekly Earnings ex Bonus (3M/(YoY) (MAY) |
0.8% |
0.9% |
Low |
|
9:00 |
EUR |
Euro-Zone Trade Balance (€) (MAY) |
16.5B |
15.7B |
Low |
|
9:00 |
EUR |
Euro-Zone Trade Balance s.a. (€) (MAY) |
16.0B |
15.8B |
Low |
|
9:00 |
CHF |
ZEW Survey (Expectations) (JUL) |
- |
4.8 |
Medium |
Critical Levels
|
EURUSD |
1.3454 |
1.3520 |
1.3544 |
1.3586 |
1.3610 |
1.3652 |
1.3718 |
|
GBPUSD |
1.6868 |
1.7000 |
1.7072 |
1.7132 |
1.7204 |
1.7264 |
1.7396 |
خوب
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newdigital, 2014.07.13 16:03
NZD/USD forecast for the week of July 14, 2014, Technical AnalysisThe NZD/USD pair broke above the 0.88 level during the previous week, suggesting that a break out was in the process of happening. If we can break above the top of the range for the week, we believe that this market will continue to head towards the 0.90 level. That level is the next resistance barrier that we can see on the longer-term charts, so therefore that’s where the market should head towards. We see a significant amount of support below as well, so really it’s not likely we find an opportunity to sell.
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newdigital, 2014.07.17 14:44
2014-07-17 12:30 GMT (or 14:30 MQ MT5 time) | [USD - Building Permits]
- past data is 0.99M
- forecast data is 1.04M
- actual data is 0.96M according to the latest press release
if actual > forecast = good for currency (for USD in our case)
[USD - Building Permits] = Annualized number of new residential building permits issued during the previous month. It's an excellent gauge of future construction activity because obtaining a permit is among the first steps in constructing a new building
==========
U.S. Housing Starts Unexpectedly Show Sharp Drop In June
New residential construction in the U.S. unexpectedly showed a steep drop in the month of June, the Commerce Department revealed in a report on Thursday, with housing starts falling to a nine-month low.
The Commerce Department said housing starts tumbled 9.3 percent to an annual rate of 893,000 in June from the revised May estimate of 985,000.
The sharp drop came as a surprise to economists, who had expected housing starts to climb to 1.020 million from the 1.001 million originally reported for the previous month.
Building permits, an indicator future housing demand, also fell 4.2 percent to an annual rate of 963,000 in June from the revised May rate of 1.005 million.
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NZDUSD M5 : 14 pips price movement by USD - Building Permits news event
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D1 price is on primary bullish stopped by 0.8834 resistance level.
H4 price is on flat with ranging between 0.8793 support and 0.8832 resistance with primary bullish.
W1 price is on primary bullish crossing 0.8793 resistance level on open bar for now.
If D1 price will break 0.8834 resistance level so the primary bullish will be continuing (good for trend following trading systems)
If D1 price will break 0.8713 support so we may see the secondary correction within primary bullish (good for counter trend systems).
If not so D1 price will be ranging within 0.8834 resistance and 0.8713 support levels (good for martingale and scalping strategies).
UPCOMING EVENTS (high/medium impacted news events which may be affected on NZDUSD price movement for this coming week)
2014-07-15 12:30 GMT (or 14:30 MQ MT5 time) | [USD - Retail Sales]
2014-07-15 14:00 GMT (or 16:00 MQ MT5 time) | [USD - Fed Chair Yellen Testifies]
2014-07-15 22:45 GMT (or 00:45 MQ MT5 time) | [NZD - CPI]
2014-07-16 02:00 GMT (or 04:00 MQ MT5 time) | [CNY - GDP]
2014-07-16 12:30 GMT (or 14:30 MQ MT5 time) | [USD - PPI]
2014-07-16 13:00 GMT (or 15:00 MQ MT5 time) | [USD - TIC Long-Term Purchases]
2014-07-16 14:00 GMT (or 16:00 MQ MT5 time) | [USD - Fed Chair Yellen Testifies]
2014-07-16 16:00 GMT (or 18:00 MQ MT5 time) | [USD - FOMC Member Fisher Speech]
2014-07-17 12:30 GMT (or 14:30 MQ MT5 time) | [USD - Building Permits]
2014-07-17 14:00 GMT (or 16:00 MQ MT5 time) | [USD - Philly Fed Manufacturing Index]
2014-07-18 13:55 GMT (or 15:55 MQ MT5 time) | [USD - UoM Consumer Sentiment]
Please note : some US (and CNY) high/medium impacted news events (incl speeches) are also affected on NZDUSD price movement
SUMMARY : bullish
TREND : bullish
Intraday Chart