NZD: New Zealand Dollar goes up following investors’ optimism

At the Forex currency market the New Zealand Dollar rate goes up today, following general optimism in the market.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to decline, giving a pair sell signal. Meanwhile, Stochastic Oscillator has come out of the oversold zone and is giving a pair buy signal. 

Forex recommendations: in case of breakdown at the level of 0.7290 buyers’ targets will be the levels of 0.7310 and 0.7340/50 today.

In general the situation in the New Zealand economy remains unchanged.

At the meeting last week the Reserve Bank of New Zealand decided to decrease interest rate by 50 basis points, to 2.50% per annum. Investors, who had predicted possible reduction of the indicator, ignored its decrease by 25 basis points.

Previous sales of the NZD were caused by the view of the country’s Prime Minister John Key, who said in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate from the current 3%; %. Investors interpreted his opinion as a call to action and pressed the pair down to the local lows. The politician does not rule out that effect of the earthquake in the South of New Zealand in February can cause the rollback of the national economy into the state of recession.

Apparently, the RBNZ will start a new phase of monetary policy tightening soon.

The New Zealand Dollar still looks extremely weak after the fall both last week and this week, and developments in Japan as well as slow down of economy in China will prevent currency’s recovery even in part. The fact that investors continue to withdraw from risks is also disadvantageous for the NZD.

Growth of the NZD is founded only on the emotional reactions of the market today.

 

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