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13 Jun 2013
Kiwi breaking lower after RBNZ
FXstreet.com (Barcelona) - After finishing the New York session up 103 pips at 0.7974, the NZD/USD is now giving back a good portion of its gains down 38 pips at 0.7936
RBNZ view on global growth remains mixed
FXStreet.com noted a number of comments made by the RBNZ Governor Graeme Wheeler, with the majority of the remarks sounding on the cautious side in regards to the global growth outlook. Furthermore, Wheeler has also been an outspoken critic of the high NZD/USD exchange rate, which he again commented on in the official release.
“The global outlook remains mixed with disappointing data in Europe and some other countries, and more positive indicators in the United States and Japan. Global financial sentiment continues to be buoyant and the medium term outlook for New Zealand’s main trading partners remains firm, commented Wheeler. In going on to further his discuss his views, Wheeler concluded, ““Despite having fallen over the past few weeks, the New Zealand dollar remains overvalued and continues to be a headwind for the tradables sector, restricting export earnings and encouraging demand for imports. Fiscal consolidation will continue to constrain aggregate demand over the projection horizon.”
NZD/USD path of least resistance remains lower
Although the initial move higher today was a good start, the NZD/USD has a lot more work to do in order to repair the technical damage done the past six weeks in order to turn the trend from bearish to neutral. Short term moving averages both remain sharply downward sloping, a bearish development which could help limit major advances. Also worth noting is price has been unable to build value and close above the 20dma since May 7th. However, from a momentum perspective, the RSI (14) is showing a number of bullish divergences on the daily chart which could be a sign downside pressure is starting to weaken. Often times, this is a development that will lead consolidation or a short term counter trend rally before another major leg down. Initial support sits at 0.7916 (the 100dma on 1 hour chart), while first resistance remains at 0.7971 (the 9dma on 1 hour chart)
RBNZ view on global growth remains mixed
FXStreet.com noted a number of comments made by the RBNZ Governor Graeme Wheeler, with the majority of the remarks sounding on the cautious side in regards to the global growth outlook. Furthermore, Wheeler has also been an outspoken critic of the high NZD/USD exchange rate, which he again commented on in the official release.
“The global outlook remains mixed with disappointing data in Europe and some other countries, and more positive indicators in the United States and Japan. Global financial sentiment continues to be buoyant and the medium term outlook for New Zealand’s main trading partners remains firm, commented Wheeler. In going on to further his discuss his views, Wheeler concluded, ““Despite having fallen over the past few weeks, the New Zealand dollar remains overvalued and continues to be a headwind for the tradables sector, restricting export earnings and encouraging demand for imports. Fiscal consolidation will continue to constrain aggregate demand over the projection horizon.”
NZD/USD path of least resistance remains lower
Although the initial move higher today was a good start, the NZD/USD has a lot more work to do in order to repair the technical damage done the past six weeks in order to turn the trend from bearish to neutral. Short term moving averages both remain sharply downward sloping, a bearish development which could help limit major advances. Also worth noting is price has been unable to build value and close above the 20dma since May 7th. However, from a momentum perspective, the RSI (14) is showing a number of bullish divergences on the daily chart which could be a sign downside pressure is starting to weaken. Often times, this is a development that will lead consolidation or a short term counter trend rally before another major leg down. Initial support sits at 0.7916 (the 100dma on 1 hour chart), while first resistance remains at 0.7971 (the 9dma on 1 hour chart)