Guys early today the NZIER Business confidence was released and turned out to be positive, at 19 for this June quarter from March quarter at 2. This boost was especially so in the construction sector which saw a rise in demand but then there was a cute shortage of skilled staff-the most acute shortage since 2003. Businesses also saw a rise in demand by 22% while other 19% of businesses saw a coming improvement in this coming quarter. Despite this entire positive outlook from businesses, there was no improvement in annual inflation with only 5% of businesses lifting prices in this past quarter. This subdued outlook might therefore prompt the RBNZ to cut the OCR further this coming August and buffer the New Zealand against global down risk caused by Britain leaving the European Union. In other news, the RBA left their cash rate unchanged at 1.75% all focus now will be about the next CPI reading and a possible further cut in August.
Now to the charts:
In the 4HR chart, it’s evident that there is a price reversal with stochastics turning from the overbought region which is near proximity with the 61.8% Fibonacci level-drawn from 2014 to 2015 Hi-Lo. We can see that also in the Asian session price made a series of lower lows and this was fueled from the bad news from Australia. We shall expect price to trend even lower this month-fundamentals points to a possible rate cut next month and technically that blue zone marked in the 4 HR zone was a level of price reversal.
If you are planning to enter this trade it will be prudent to wait till this candle closes and sell at all highs in the next candle as follows:
TP-Trail profits as usual