Personally for me this was a very interesting week on the charts, as I have never experienced such an event of great magnitude which caused some volatility I have never experienced before. However, a lot of learning in that regard. without dwelling much into the U.S elections, this past week we saw the RBNZ slashing Official Cash Rates for which everyone was pretty much expecting. Even though this was at most priced in, we saw the kiwi going up in price just as the cut was announced. The governor, Greame Wheeler, announced that the RBNZ was now expecting a 1.7% inflation as opposed to the 1.6% previously stated by the bank. The Bank’s pectoral factor model currently sits at 1.5% for the September quarter. Electronic card retail sales nudged up 0.2% to what was expected, 0.4%. The PMI for October was 55.2, a reading that shows expansion in the manufacturing sector.

Manufacturing PMI
It is worth noting that New Zealand’s manufactured exports make up around 85% of all merchandise exports from the country and that makes manufacturing and exporting vital for the country. The manufacturing sector is steadily moving towards more innovative and specialized goods and services that earn higher export revenues. The PMI couldn’t quite hang onto its relatively high level of 57.5 in September, at 55.2 in October it was still positive.

Electronic Card Retail Sales
The outlook of spending has been strengthening due to the conditions in the labor market and the economy generally. Both have picked up and this gives people some sort of confidence to spend their money.

Interest Rate Decision
At this week’s Monetary Policy Meeting the RBNZ cut the Official Cash Rate by 0.25% to an all time low of 1.75%. I personally believe that they are done and the next cut is nowhere near even though there are uncertainties. On a statement by Governor Wheeler, He stated that the monetary policy remains to be accomodative and will adjust accordingly. We will see growth strong enough to have inflation settle near the middle of the target range.

For further reading, I have provided links to sites I used to compile this information.
Monetary Policy Statement
Governor Greame Wheeler’s Statement
ANZ Research
Business NZ

NzdUsd Daily Chart

Price opened just below the Monthly Pivot Point 0.71495 and as I stated in my weekly forecast I posted for this past week, that bulls were on their quest to take price all the way to the bull target, that was achieved on tuesday as we saw price coming off WM4 @ 0.7368. We then saw a drive lowering the kiwi and this was due to the mighty strength of the greenback slamming it against the bottom of the uptrend channel the pair has been moving within.

NzdUsd H4 Chart

Price has also been moving through an upward channel on the H4 chart. We saw it opening just below the WM3 pivot with immediate resistance above @ 0.733307. It then broke it and traded up until WR1 which coincides with the top of the uptrend channel. The strength in the dollar took it all the way down breaking 3 support levels and the bottom of the uptrend only to find support at WM1.

NzdUsd H1 Chart

We saw greenback strength as of Wednesday due to to market reactions towards the US elections. Surprisingly the pair didn't make up for it's losses as we saw with other USD pairs. Daily bull targets were met on three consecutive days with some profit taking in between. price closed off at the end of the week @ 0.71232.

3 thoughts on “Kiwi Weekly Review – 7-11 November 2016”

  1. Maryna says:

    Thanks for the post. I don’t often trade USD pairs, but interested to hear what your plan will be now that it has hit support on the H1 and H4 charts and the week ended with a large bearish candle?

    1. Tsholanang Tsholanang says:

      I will post my forecast in a few. You should check it out

  2. Ryan Gandalf van Jaarsveld says:

    Top notch bud! Looking forward to your weekly forecast and seeing how this pair plays out over the coming week… Would be keen to hear your thoughts on the NZD major crosses

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