NZD: New Zealand Dollar may turn into correction after a rapid growth

At the Forex currency market the New Zealand Dollar rate starts a slight retreat that is natural after a rapid growth seen last week.

Forex forecast: MACD indicator is in the negative area for the pair NZD/USD and continues to rise, weakly indicating buyers’ sentiment. Stochastic Oscillator aims at leaving the overbought zone, forming a sell signal.

Forex recommendations: if current bearish sentiments strengthen in the market sellers’ targets will become the levels of 0.7500 and 0.7480.

Februaries’ trade balance data will be released on Tuesday this week, further dynamics of the pair NZD/USD will depend on the external background. Note that last week the New Zealand Dollar has regained almost completely from the reduction which followed the decision of the RBNZ.

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

It became the reason of the dramatic fall of the NZD, and what is more, Prime Minister John Key said earlier in his interview to Bloomberg News that he would have approved the decision of the Reserve Bank of New Zealand to reduce interest rate.
Statistics released showed that GDP in New Zealand rose by 0.2% m/m (+0.8% y/y) in QIV against the forecast of growth by 0.1% m/m, which support positive dynamics in NZD.

Statistics of the last week showed that balance of current account in New Zealand decreased to -NZ$3.5 billion against the value of -NZ$1.77 billion in QIII. The balance is most likely decreased due to the seasonal factors and we surely can see improvement in the situation.

 

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