NZD: New Zealand Dollar is on sale at the local highs

The New Zealand Dollar rate is traded downward at the Forex currency market this morning, because players are moving away from risky positions. Testing of the new local highs yesterday also goes against the NZD today –the pair NZD/USD looks too overheated.   

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD and is moving along the signal line, not giving a signal. Stochastic oscillator remains in the overbought zone today, maintaining a pair buy signal.

Forex recommendations: correction can lead the pair NZD/USD to 0.7940. If a breakdown does not take place the pair will be traded close to the existing levels.

The situation in the economy of New Zealand remains almost unchanged.
Activity in March has not been impressive: business confidence index NBNZ fell to -8.7 in New Zealand against 34.5 in the previous period. It is difficult to judge which factor has caused such rollback and it is worth waiting for the new data to be able to speak about one or another trend.

Statistics released earlier showed that inflation in New Zealand rose by 0.8% on quarterly basis (+4.5% y/y) in QI against the forecast of growth by 1.0% on quarterly basis. Therefore, CPI in the country was weaker than expected which indicates that recovery pace of the national economy is slow.
Statistics released earlier was mixed: index of houses prices REINZ increased by 0.5% in March against preliminary forecast of growth by 2.3%; while sale of houses reduced by 5.1% last month against preliminary level of -10.5%. In addition prices for food rose by 0.3% in March against preliminary target of -10.5%. In addition prices for food increased by 0.3% in March against the preliminary target of 0.1%. Earlier the country reported that trade surplus was positive for the first time in the last 8 months. High raw material prices which have been maintained in the world market became a catalyst for this, as well as the growth of export levels of timber and dry milk. Exports increased by 17% y/y in February; imports – by 23% y/y, to the level of 3.86 billion of NSD. Exports in New Zealand amounts to about 30% of the total GDP level and the increase in this article will have a positive impact on the national economy.

Addition it also became known that the level of business confidence in New Zealand declined by 27% in QI, as per NIESR estimates against the level of +8 points in QIV.

 

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