NZDUSD Technical Analysis 2015, 08.03 - 15.03: Daily Bearish Breakdown - page 2
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newdigital, 2015.03.12 06:19
2015-03-11 20:00 GMT (or 22:00 MQ MT5 time) | [NZD - Official Cash Rate]if actual > forecast (or previous data) = good for currency (for NZD in our case)
[NZD - Official Cash Rate] = Interest rate at which banks lend balances held at the RBNZ to other banks overnight. Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future.
==========New Zealand's Official Cash Rate Unchanged At 3.50%
The Reserve Bank of New Zealand's monetary policy board on Thursday announced that it was holding its Official Cash Rate steady at 3.50 percent - in line with expectations.
It was the fifth straight month with no change for the RBNZ, which had hiked the OCR by 25 basis points in each of previous four meetings prior to September.
Before that, there were 23 straight meetings with no change. The OCR had been at a record low 2.50 percent since March 10, 2011 as the country dealt with the global economic slowdown.
It wasn't until last March that the central bank felt confident enough in a recovery that it lifted the OCR - although no additional action is likely in the near term.
"Global financial conditions remain very accommodative, and are reflected in high equity prices and record low interest rates. However, volatility in financial markets has increased since late-2014 following the sharp drop in oil prices, continued uncertainty about the global outlook and U.S. monetary policy, and policy easings by a number of central banks," the bank said in a statement accompanying the decision.
"The New Zealand dollar remains unjustifiably high and unsustainable in terms of New Zealand's long-term economic fundamentals. A substantial downward correction in the real exchange rate is needed to put New Zealand's external accounts on a more sustainable footing," the bank said.
The RBNZ called it prudent to take more time and further observe the effects of its moves to date.
The bank pointed to several factors for taking its time in taking any further actions, including weak global inflation, falls in international oil prices and the high exchange rate.
"Our central projection is consistent with a period of stability in the OCR. However, future interest rate adjustments, either up or down, will depend on the emerging flow of economic data," the bank said.
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NZDUSD, M5, 2015.03.12
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NZDUSD M5: 115 pips price movement by NZD - Official Cash Rate news event
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newdigital, 2015.03.12 07:13
NZD/USD Retains Bearish Momentum Ahead of RBNZ- 0.7175 in Focus (based on dailyfx article)
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newdigital, 2015.03.12 13:16
NZD/USD rallies over 1% after RBNZ holds rates (based on nasdaq article)
The New Zealand dollar rallied over 1% against its U.S. counterpart on Thursday, after the Reserve Bank of New Zealand left interest rates on hold, citing strong economic growth.
NZD/USD hit 0.7389 during late Asian trade, the pair's highest since March 9; the pair subsequently consolidated at 0.7408, rallying 1.58%.
The pair was likely to find support at 0.7249, the low of March 10 and resistance at 0.7519, the high of March 6.
In a widely expected move, the RBNZ held its benchmark interest rate at 3.50% and signalled that borrowing costs should remain unchanged through 2017.
Commenting on the decision, RBNZ Graeme Wheeler said "Our situation is quite different from some of those countries that have changed monetary policy or cut interest rates."
The economy is "growing at 3.25%, perhaps 3.5% and we're projecting it to continue to grow at those sorts of rates over the next two years," he added.
Meanwhile, the greenback weakened as investors eyed data on U.S. retail sales and initial jobless claims due later in the day, after the currency rallied broadly on the back of last week's strong employment report.
The kiwi was also higher against the euro, with EUR/NZD dropping 0.79% to 1.4343.
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newdigital, 2015.03.12 08:59
Trading the News: U.S. Retail Sales (based on dailyfx article)
A rebound in U.S. Retail Sales may heighten the bullish sentiment surrounding the greenback and spur a further decline in EUR/USD as it fuels speculation for higher borrowing-costs in the world’s largest economy.What’s Expected:
Why Is This Event Important:
The Fed may stay on course to normalize monetary policy in mid-2015 as the central bank anticipates lower energy prices to boost private-sector consumption – one of the leading drivers of growth – and Chair Janet Yellen may adopt a more hawkish tone at the March 18 meeting as the board remains confident in achieving the 2% target for inflation.
Nevertheless, subdued wages along with the slowdown in private-sector credit may drag on retail spending, and another unexpected contraction may further delay the Fed’s normalization cycle as the ongoing weakness in household earnings undermines the central bank’s scope to achieve the inflation target.
How To Trade This Event Risk
Bullish USD Trade: U.S. Retail Sales Rebounds 0.3% or Greater
- Need red, five-minute candle following a positive print to consider a short EUR/USD trade.
- If market reaction favors a bullish dollar trade, sell EUR/USD with two separate position.
- Set stop at the near-by swing high/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.
Bearish USD Trade: Household Spending Disappoints- Need green, five-minute candle to favor a long EUR/USD trade.
- Implement same setup as the bullish dollar trade, just in reverse.
Potential Price Targets For The ReleaseEURUSD Daily Chart
- Despite the long-term bearish outlook for EUR/USD, will
keep a close eye on the Relative Strength Index (RSI) as it approaches
key support levels.
- Interim Resistance: 1.1185 (23.6% expansion) to 1.1210 (61.8% retracement)
- Interim Support: 1.0375 (78.6% expansion) to 1.0400 pivot
Impact that the U.S. Retail Sales report has had on EUR/USD during the previous month(1 Hour post event )
(End of Day post event)
2014
EURUSD M5: 44 pips price movement by USD - Retail Sales news event
U.S. Retail Sales declined another 0.8% in January following a 0.9% contraction the month prior. Despite lower energy costs, discretionary spending at department stores slipped for the second consecutive month, while demand for motor vehicles and parts slid another 0.5% during the same period. Following the worse-than-expected print, the greenback struggled to hold its ground, with EUR/USD climbing above the 1.1400 handle and closed the day at 1.1428.
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NZDUSD, M5, 2015.03.12
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NZDUSD M5: 45 pips price movement by USD - Retail Sales news event
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newdigital, 2015.03.13 07:21
NZD/USD Technical Analysis: Recovery Seen as Corrective (based on dailyfx article)
The New Zealand Dollar launched a recovery against its US counterpart, putting in the largest daily advance in two months. Near-term resistance is at 0.7444, the 23.6% Fibonacci expansion, with a break above that on a daily closing basis exposing the 14.6% level at 0.7508.Alternatively, a reversal below the 38.2% Fibat 0.7340 opens the door for a challenge of the 50% expansion at 0.7256.
We see the dominant NZDUSD trend as bearish. As such, we will treat any on-coming gains as corrective, looking to enter short at a more attractive level rather than a seeing the move higher as a buying opportunity. In the meantime, we remain flat.