New Zealand dollar hotspots
NZD / USD seems to be on track to test the monthly peak (0.7170) as it trades back more than 200-day SMA (0.7115) and the exchange rate could threaten the September opening period before New Zealand’s Gross Domestic Product (GDP) report the economy is expected at a record pace.
NZD / USD threatens monthly opening range before GDP report
NZD/USD snaps a series of lower ups and downs from the start of the week US dollar weakness and the exchange rate may lead to a larger recovery in the coming days as it trades above 200-day SMA (0.7115) for the first time after July.
Looking ahead, the update of the New Zealand GDP report could trigger an upward reaction in NZD / USD, with growth expected to grow at 16.4% per year in the second quarter, the fastest growth rate since the start of the 1987 accounts. positive developments could encourage the New Zealand Reserve Bank (RBNZ) to raise its official cash interest rate to a record lowThe EESC agreed that they are confident that they will play their role in inflation and employment and do not need less financial incentives.. “
As a result, the New Zealand dollar could make a bigger recovery against its US counterpart RBNZ Assistant to the Governor Christian Hawkesbyreveals that at their meeting “there were definitely 50 basis points on the table” August, but a further appreciation of the exchange rate could contribute to the recent decline in retail sentiment, as at the beginning of this year.
The IG customer feelings report shows 36.38% of traders are now net length NZD / USD, where the relationship between traders is short and long standing 1.75 to 1.
The number of traders online is 8.30% higher than yesterday and 14.34% higher than last week, while the number of short traders is 12.39% lower than yesterday and 3.51% higher than last week. The jump in net length interest rates has helped to ease crowding-out behavior, as last week only 35.25% of traders had net lengths of NZD / USD, while the rise in the net short position comes even if the exchange rate appears to be on track. monthly peak of the test (0.7170).
However, NZD / USD may threaten the September opening period ahead of the New Zealand GDP report as it trades back 200-day SMA (0.7115),however, the increase in the lowest level in August (0.6805) may turn out to correct the broader trend, as the exchange rate will reach its annual low in the second half of 2021.
Daily schedule of NZD / USD exchange rate
Source: Trading View
- Keep in mind that the head and shoulders arose in the first quarter of 2021 as NZD / USD fell below the 50-day SMA (0.6998) for the first time since November, when the decline from its highest level of the year (0.7465) pushed the exchange rate below the 200-day SMA (0.7115) for the first time after June 2020.
- However, the NZD / USD has reversed its pre-November 2020 low (0.6589) due to a failed attempt to close below 0.6810 (38.2% expansion). break / close above Fibonacci overlap from about 0.7070 (61.8% expansion) to 0.7110 (38.2% expansion) pushing the exchange rate back higher 200-day SMA (0.7115).
- A break in the September opening will bring radar 0.7260 (78.6% expansion) area, with the next area of interest being about 0.7330 (38.2% retracement) to 0.7350 (23.6% expansion).
- At the same time, there is no momentum to keep up Fibonacci overlap from about 0.7070 (61.8% expansion) to 0.7110 (38.2% expansion) may NZD / USD backward direction 0.6990 (23.6% retracement) range, together the next area of interest is around 0.6940 (50% expansion) to 0.6960 (38.2% retracement).
– Written by David Song, currency strategist
Follow me on Twitter at @DavidJSong