Yesterday we saw a steady rise of NZD against its counterpart and trended in the 0.698 regions buoyed by the bad economic news from the US where we saw a decline of Real GDP for the first quarter to 0.5% from the 4th quarter of 2015 which saw it rise to 1.4%. We also saw the number of unemployment claims rising to 257K from last week’s 248K. Both data were released in the New York session and we saw the pair rise in lieu with the data till the Asian session with price rising from the 0.696 level to today’s high at 0.698 though there was a correction from that level maybe from the news that the monthly New Zealand Building consents dropped to -9.8% from February’s 10.8%. Despite this slow decline in the number of buildings, this is the highest continuous rise of building consent since mid-2004 and shows a general sign of easing in the economy especially with the number of residential building rising 10% this in March.
With this news, let’s see what happened to our charts:
Daily Chart Analysis
If this chart is analyzed in relation to the monthly and weekly charts that we can expect prices to trend even higher and if you miss to buy after yesterday close then it will be a grand opportunity for you to go long from any price dips in this pair. Technically speaking, this pair is on the up with the formation of that up bar due to the RBNZ decision to keep the interest rate constant. This up bar is also supported by the behavior of other indicators as the 20 day moving average whose slope has remained unchanged for the better part of this year. Also of note is the OBV which continues to add volume and will charge the upward momentum as the stochastics switch on and indicate bullish.
From this week’s data, we can only brace ourselves and take advantage of all the bad news coming from the US and continue to buy the Kiwi. Notably, the Feds statement to hold the rates constant because of inflation and general global outlook will be crucial in determining the short-term to long term trend of this pair maybe until June when we shall expect to hear Yellen speak about these contentious issues.
4 HR Chart Analysis
The pair is tightly hugging the upper band of the BB showing that the upward momentum is high after price reversed strongly from the 200 day moving average and thereby closing strongly above the resistance turned support formed in the last 5 months-clearly observed in the daily chart. This confluence of resistance and supports is important and will determine future behavior of price actions. If you were a bull since the beginning of the week, we shall have to move our stops to break even as we observe what kiwi demand has to offer.
15 Min Chart Analysis
The talk of the week got to be the action of the RBNZ and the Fed in determining the current trend of this pair. To begin, we see a ranging market after that strong bullish bar with price action trending lower and not breaking past yesterdays high at 0.698 regions. If there is a break above that level then price will probably rise and orders at the 161.8 Fibonacci level might be filled. At the moment, buy at all lows as indicated by indicator combination.
Otherwise, have a good trading day and nice weekend.