NZD: New Zealand Dollar would not grow weary of reaching new local highs

 At the Forex currency market the New Zealand Dollar rate remains close to new local peaks on Friday.

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and is going up, giving a buy signal; volumes are high.  Stochastic Oscillator remains in the overbought zone; however, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8640, the pair will go to 0.8655 and 0.8680.

The pair could drop to 0.8580 as part of correction at the end of the week.There is speculation in the market that the Reserve Bank of New Zealand is looking closely at market’s reaction to the measures to resolve debt crisis in Europe which might imply a disposition to raise the level of the interest rate at the meeting next week.Net level of budget deficit in New Zealand rose to -NZD$40 billion (20.4% billion of the country’s GDP) in May, which was below economists’ forecast.

According to the estimates of the Finance Minister Mr. English, budget deficit is still too large and active measures are required to reduce it. CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is one more positive characteristic of the economic status in New Zealand.Statistics released earlier showed that GDP in New Zealand rose by 0.8% on quarterly basis (+1.4% y/y) in Q1 against the forecast of growth by 0.3% q/q (+0.5% y/y).

The indices have been very favourable, which supports the NZD. It is possible that the data will be less positive in Q2; however in general, the trend will remain the same, which is favourable for the pair NZD/USD in the long term.It became known earlier that business sentiment NZIER in New Zealand rose to 27 points in Q2 against -27 points earlier. In general, it is a positive factor.Trade balance in New Zealand was at the level of NZD$605 billion in May against the forecast of NZD$1000 billion. This is a negative data, because decline in the trade balance will indicate decline in the level of exports later, which will be the impact of cooling in Chinese economy.

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