NZD/USD Daily Fundamental Analysis for August 23, 2011

The second round of quantitative easing in U.S. was part of the reason behind a jump in commodity prices and recorded historical levels along with the increased risk appetite in the market that supported investors demand on commodities, damping the demand for higher yielding currencies such as the New Zealand dollar.

Furthermore, the New Zealand dollar (Kiwi) also slumped to a 2-month low versus the dollar as the European debt crisis escalated once again because of Italy and Spain threat of falling, so investors’ fears are escalating which is a negative impact on the market movements, where Italian and Spanish 10-year governments bonds plummeting in the European session.

The kiwi dropped against greenback to the lowest level during the month after Asian stock markets started the week with a sharp decline, which comes as a negative outlook for Asian companies, reducing demand for Kiwi.

On Tuesday, the New Zealand economy is to release its 2-year inflation expectations for the third quarter at 03:00 GMT, where the prior reading inclined by 3.0% in the second quarter of the year.

At 14:00 GMT, the U.S. economy will release the new home sales for July, where it’s expected with 1.0% rise from 312 to 315 thousands.

The Richmond Fed Manufacturing Index for August will be up at 14:00 GMT where it had a previous reading of –1.0 and expected to at -8.0.

NZD/USD Technical Analysis August 22, 2011

The NZD/USD pair rose, and then fell on Friday. The candle for the day looks very weak, and is actually a bit of a shooting star. The pair looks set to test the 0.8000 level, and if that area doesn’t hold – we expect a lot of room to the downside as this would be seen as a major break of support. The pair could rally, but it is looking increasingly weak, and we would be interested in selling it we do. Until then, this pair could bounce around quite a bit.

NZD/USD Technical Analysis for the Week of August 22, 2011

The NZD/USD pair fell this past week as traders sold off the “risk on” trade. The commodity currencies look vulnerable at the moment, and the Kiwi dollar is no exception. The large red candle is currently plowing into the hammer from last week, but because of that hammer, we see there will be some support at the 0.8000 level. This area is where the real battle begins. If we can get a solid close below it – we are looking to sell. However, that area does look like it could be very supportive, so we will wait for a closing bar on the daily, if not weekly to make that decision.

NZD/USD Weekly Fundamental Analysis for August 22-26, 2011

The New Zealand dollar started this week with a decline after the pair gained during the past week. Kiwi failed to continue its upside movement as US economic growth slowed during the period, supporting the dollar to incline.

Still the investors are afraid from the main events that dominate the market that has negative results on the global economic growth which pushed the New Zealand currency down on concerns over a slowdown in the global economic recovery.

The NZ dollar declined against majors as expectations indicated that European debt crisis is to escalate, while fears extended over the heading into another global recession which dampened the appeal of risky assets and commodities and surely growth linked currencies as kiwi.

On the other hand, the market will continue its downside movement until cheerful data reverses the market movement to the upside.

Amid the lack of fundamental data this week especially from the New Zealand economy, the NZD/USD pair will trade according to the market sentiment this week.

Major highlights for this week that will affect the NZD/USD pair’s trading:

Monday August 22:

The U.S. economy will issue the Chicago Fed Activity Index for July at 12:30 GMT, where it’s expected to drop by 0.48 from the previous fall of 0.46.

Tuesday August 23:

New Zealand economy will release the 2-year inflation expectations index for the third quarter at 03:00 GMT where the prior reading inclined by 3.0% in the second quarter of the year.

On Tuesday at 14:00 GMT, the U.S. economy will release the new home sales for July, where the previous reading was down by 1.0% at 312 thousands and expected to rebound by 1.0% to 315 thousand.

Wednesday August 24:

At 22:45 GMT (Tuesday) the market is waiting important data from the New Zealand economy, where the economy is to present its trade data for the month of July after the recorded trade surplus of NZ$230 million in June.

Exports are expected to show an increase during July after rising to NZ$3.97 billion in June, while the nation’s imports showed NZ$3.74 billion in June.

The U.S. durable goods orders for July will be due at 12:30 GMT, where it’s expected to show a rise of 2.0% from the prior drop of 2.1%. On the other hand, the durable goods excluding transportations for July had a previous reading of 0.1%, and expected to drop by 0.6%.

The house price index for June will be released at 14:00 GMT, where the previous reading was up by 0.4% and expected to come at 0.2%. As for the house price purchase index for the second quarter, it had a prior reading of –2.5%.

Thursday August 25:

At 22:45 GMT (Wednesday) New Zealand will show report the retail sales ex. Inflation index for the second quarter after rising by 0.9% during the first quarter of the year.

At 12:30 GMT, the U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 408 thousand last week.

Friday August 26:

The U.S. economy will release the annualized Gross Domestic Product for the second quarter at 12:30 GMT, where the previous reading showed a growth of 1.3% and expected to be revised lower to 1.1%.

The Personal Consumption for the second quarter is expected to show a rise of 0.2% from the prior reading of 0.1%, while the core PCE for the second quarter is expected to remain unrevised at 2.1%.

At 13:55 GMT, the U.S. economy will release the University of Michigan survey of consumer confidence sentiment for August, where the final reading is expected to be revised higher to 56.0 from 54.9.

NZD/USD Daily Fundamental Analysis for August 22, 2011

New Zealand’s currency (Kiwi) has declined to the most in three weeks, and extended its loss versus greenback to the longest losing streak since May 2010, after commodity prices declined.

On the other hand, Asian stocks fell, with the regional index revisiting levels from last week’s global stocks rout, amid signs the world economy is slowing and Europe’s debt crisis will damage the banking system.

The New Zealand currency slumped to the lowest level in two weeks, affected by the bad outlook for the global economic recovery, while started its sharp downside movement after the Standard & Poor’s 500 index posted its biggest loss since February 2009.

On Monday, the NZ economy won’t release any fundamental data, but theU.S.economy will issue the Chicago Fed Nat Activity Index for July at 12:30 GMT, where it’s expected to drop by 0.48 from the previous fall of 0.46.

NZD/USD Technical Analysis August 19, 2011

The NZD/USD pair fell rapidly during the Thursday session as traders shunned anything risk-related in the markets. The slowdown that seems to be indicated by the Philly Fed numbers out of the US doesn’t bode well for commodities as it showed manufacturing slowing down. Less manufacturing, less commodities used – it’s that simple. Being a commodity currency, the Kiwi dollar suffered as a result.

Technically, the pair looks like it is entering a minor support area in the 0.82 range, and could bounce from this area. However, the fall was significant, and these moves almost never happen in a vacuum. The 0.8000 level will be vital to the future direction of this pair. We are willing to let this pair do whatever it wants over the next couple of sessions as the readiness to fall certainly has us doubting the bullishness of the buyers. Look for a bounce from 0.80, or at least a calming of the pair in order to buy. If we close on the daily chart below 0.80 – this could change many things about our analysis and none of them to the bullish side of the argument.

NZD/USD Daily Fundamental Analysis for August 19, 2011

The NZD/USD pair dropped early Thursday, where the greenback gained momentum against other major currencies, as risk aversion controlled the market sentiment sending the lower-yielding currencies to the upside.

Standard and Poor’s released Wednesday a report that reduced the U.S., economy outlook through 2013 due to the current financial market situation.

More signs have been added to the gloomy picture of the U.S. economy outlook, since the U.S. credit rating downgraded by S&P fueled more concerns over the outlook for the global recovery.

The New Zealand economy is on track, as the economy runs with good performance amid the global conditions, where higher consumer spending and employment add to evidence the nation’s economy grew modestly in the first quarter, buoyed by record-low interest rates and a surge in commodity prices. Continued growth in domestic demand this year may prompt central bank Governor Alan Bollard to raise interest rates as early as the fourth quarter.

On Friday, the New Zealand economy will end the week by releasing its credit card spending at 03:00 GMT after it jumped 0.40% in June, and the annual index increased to 4.5%.

NZD/USD Technical Analysis August 18, 2011

The NZD/USD pair rose on Wednesday, but managed to fall slightly at the end of the session. The pair is decidedly bullish, and it appears we could be building a bit of a base between 0.80 and 0.83 from which to launch the next bullish move. However, is also should be said that the pair looks like it might take a while to do this.

The NZD/USD has a long history of going nowhere for a long period of time, and then exploding in one direction or another. This is because the market for the Kiwi is relatively small, and as such – the moves become a bit more explosive. We recommend buying on the dips in anticipation of a large move to the upside.

NZD/USD Daily Fundamental Analysis for August 18, 2011

The New Zealand currency, nicknamed Kiwi, declined to the most level in two days against the dollar after the nation reported that the producer input prices declined at a slower pace, output costs rose.

The nation witnessed some improvement in the second three months after the natural disasters that hit the economy. Further, the European crisis along with the sluggish U.S. economy growth had affected the recovery outlook.

The New Zealand economy is on track, where higher consumer spending and employment add to evidence the nation’s economy grew modestly in the first quarter, buoyed by record-low interest rates and a surge in commodity prices. Continued growth in domestic demand this year may prompt central bank Governor Alan Bollard to raise interest rates as early as the fourth quarter.

On Thursday the U.S. economy will release the consumer price index for July at 12:30 GMT, where it is expected to rise by 0.2% following 0.2% drop, and on the year expected at 3.3% from the prior reading of 3.6%.

At 12:30 GMT, U.S. economy will release the weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance eased to 395 thousand last week.

The U.S. leading indicators for July will be released at 14:00 GMT and expected with 0.2% rise following 0.3%. The Philadelphia Fed for August is expected to come at 4 from the prior reading of 3.2.

At 14:00 GMT, the U.S. economy will release the existing home sales for July, where it’s expected to come at 4.94 million rising 3.5% from the previous 4.77 million.

NZD/USD Technical Analysis August 17, 2011

NZD/USD had a slightly confusing day on Tuesday as traders shunned risk for a large part of the session. However, the pair did manage a bounce in the latter hours to form a hammer. This is the second one in a row from the minor area at 0.83, and this could signal further strength ahead – at least until we see 0.85, which is the next major resistance area. We are buyers on a break of the Monday and Tuesday highs. We don’t sell this pair as the Kiwi has been far too bullish lately.

NZD/USD Daily Fundamental Analysis for August 17, 2011

The NZD/USD pair dropped for the second day after the US dollar regained momentum against most of its major counterparts; on the other hand the disappointing manufacturing figures from the U.S. encouraged investors to abandon higher yielding currencies.

The risk aversion is paramount in the FX market, as investors increase demand for the greenback over other higher yielding currencies. Financial and economic problems are still causing fears between market participants, which translated to a negative market sentiment for currencies.

The New Zealand economy witnessed some improvement in the second quarter after the natural disaster that hit the economy. Further, the European crisis with the sluggish U.S. economy is still affecting the global economy, where New Zealand economy is one of the countries that are affected by this crisis.

On Wednesday, the U.S. economy will release the PPI index for July at 12:30 GMT, where the previous reading was down by 0.4% and expected at 0.1%, while the annual reading is expected to come at 7.0% in line with the previous.

NZD/USD Technical Analysis August 16, 2011

NZD/USD had a very quiet day as traders embraced all things risk-related on Monday. This is particularly odd as the Kiwi is considered a massive “risk on” play. The pair has gravitated towards the 0.83 level, even if it is somewhat minor in its importance. The upcoming PPI Input number on Tuesday could move this pair a bit, but in the meantime, we see this as being in a “holding pattern”. If the PPI Input number comes in higher than expected, ( > 1.2%) we could see a surge back to 0.85 in short order. If not, we think this pair wants to meander around the current level.

NZD/USD Daily Fundamental Analysis for August 16, 2011

Kiwi started the week with an upside movement against the American dollar, as Asian stock markets extended a global equities rebound, spurring demand for higher yielding currencies.

TheNew Zealandeconomy witnessed some improvement in the second three months after the natural disaster that hit the economy. Further, the European crisis with the sluggish U.S. economy are still affecting the global economy at this time, so the New Zealand economy is one of the countries affected by this crisis.

New Zealand’s Central Bank expect economic growth in New Zealand to expand 0.3% during the first three months of 2011 after economic activity showed some signs of recovery along with household spending expected to widen softly. The outlook for the New Zealand economy is improving.

On Tuesday, the NZ economy will release the producer price inputs for the second quarter at 22:45 GMT (Monday) that is expected to rise by 1.0% compared with a previous 2.2%.

The U.S. economy will release the import price index for July, where the previous reading was – 0.5% and expected to come at –0.1%, while the annual import price index for July is expected to come at 13.4% from the previous 13.6%.

The U.S. housing starts index for July will be up released at 12:30 GMT, where it had a previous reading of 629 thousand and expected to come at 608 thousand down by 3.3%.

As for the building permits for July it will be up at 12:30 GMT, where it’s expected at 605 thousand down by 1.9% from the previous 624 thousand.

On the other hand, the industrial production for July will be published at 13:15 GMT, where it had a previous reading of 0.2% and expected to come at 0.5%. The capacity utilization for July is expected to come at 76.9% from the previous reading of 76.7%.

NZD/USD Technical Analysis August 15, 2011

The NZD/USD pair fell and then rose on Friday, as the traders stepped in and took on more risk as the day grew older. The pair has been very bullish for quite some time, and it appears that it will continue to be so in to the future. The 0.80 is our line in the sand: If we go lower than the mark, we are not buying anymore. The 0.85 just ahead will probably cause a pullback if we go higher, and that could be your entry point to buy.

NZD/USD Technical Analysis for the Week of August 15, 2011

NZD/USD fell hard, bounced from the 0.80 level, and then formed a hammer this past week. This shows that the pair is ready to continue its bullish run, and as the Kiwi has been so strong – we are not willing to go against that trend. The pair is a buy if we can break the highs of the previous week, and the Kiwi will without a doubt appreciate. The breaking below 0.80 would be devastating, and we would sell this market aggressively.

NZD/USD Daily Fundamental Analysis for August 15, 2011

The NZD/USD pair propped sharply last week, as demand increased on the greenback and low yielding currencies due to concerns over the global economic outlook, and the uncertainty about financial markets.

The New Zealand currency reached to the lowest level in two months against the US dollar as Standard Poor’s reduced the US’s long-term on August 15 to AA+ from AAA.

New Zealand dollar dropped also against the Japanese yen after Asian stocks declined to the lowest level since 2008 on concern the U.S. economy might fall in recession again, damping demand for the higher-yielding currencies.

At 22:30 GMT (Sunday), the New Zealand economy is to release the first data during the week with the performance service index for July that reached 54.7 a previous month.

The U.S. empire manufacturing for August will be issued at 12:30 GMT, where the previous reading was down by 3.76 and expected to show a rise of 1.50.

At 13:00 GMT, the U.S. economy will release the net long-term TIC flows for June, where the previous reading was $23.6 billion. The total net TIC flows for June will be up at 13:00 GMT, where it had a previous reading of – $67.5 billion.

NZD/USD Weekly Fundamental Analysis for August 15-19, 2011

The following events and economic reports may influence trading for Asian currencies, where New Zealand’s dollar dropped for the fifth time in six days, reaching the lowest level in more than 6 weeks versus the dollar after commodities that make up a majority of the South Pacific nation’s exports declined.

The market’s movements affected after the Standard & Poor’s agency reduced the U.S. long-term credit rating from AAA to AA+, increasing demand for safe havens currencies such as the Yen and Franc.

Moreover, New Zealand dollar dropped against the Japanese yen after Asian stock markets declined to the lowest level since 2008 on concern the U.S. economy might fall in recession again, damping demand for the higher-yielding currencies.

The NZ unemployment witnessed some improvement in the second three months on rising consumer spending, and employment add to evidence the nation’s economy grew modestly in the second quarter, buoyed by record-low interest rates and a surge in commodity prices. Continued growth in domestic demand this year may prompt central bank Governor Alan Bollard to raise interest rates as early as the fourth quarter.

In the week ahead, the NZD/USD pair will move in line with the market sentiment that will be the main driver for markets with the focus on the slowing growth and deepening debt crisis in Europe.

Major highlights for this week that will affect the NZD/USD pair’s trading

Monday August 15:

At 22:30 GMT (Sunday), the New Zealand economy is to release the first data during the week with the performance service index for July that reached 54.7 a previous month.

The U.S. empire manufacturing for August will be issued at 12:30 GMT, where the previous reading was down by 3.76 and expected to show a rise of 1.50.

At 13:00 GMT, theU.S.economy will release the net long-term TIC flows for June, where the previous reading was $23.6 billion. The total net TIC flows for June will be up at 13:00 GMT, where it had a previous reading of – $67.5 billion.

Tuesday August 16:

NZ economy will release the producer price inputs for the second quarter at 22:45 GMT (Monday) that is expected to rise by 1.0% compared with a previous 2.2%.

The U.S. economy will release the import price index for July, where the previous reading was – 0.5% and expected to come at –0.1%, while the annual import price index for July is expected to come at 13.4% from the previous 13.6%.
The U.S. housing starts index for July will be up released at 12:30 GMT, where it had a previous reading of 629 thousand and expected to come at 608 thousand down by 3.3%.

As for the building permits for July it will be up at 12:30 GMT, where it’s expected at 605 thousand down by 1.9% from the previous 624 thousand.

On the other hand, the industrial production for July will be published at 13:15 GMT, where it had a previous reading of 0.2% and expected to come at 0.5%. The capacity utilization for July is expected to come at 76.9% from the previous reading of 76.7%.

Wednesday August 17:

The U.S. economy will release the PPI index for July at 12:30 GMT, where the previous reading was down by 0.4% and expected at 0.1%, while the annual reading is expected to come at 7.0% in line with the previous.

Thursday August 18:

The U.S. economy is to release the consumer price index for July at 12:30 GMT, where it is expected to rise by 0.2% following 0.2% drop, and on the year expected at 3.3% from the prior reading of 3.6%.

At 12:30 GMT, U.S. economy will release the weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance eased to 395 thousand last week.

The U.S. leading indicators for July will be released at 14:00 GMT and expected with 0.2% rise following 0.3%. The Philadelphia Fed for August is expected to come at 4 from the prior reading of 3.2.

At 14:00 GMT, the U.S. economy will release the existing home sales for July, where it’s expected to come at 4.94 million rising 3.5% from the previous 4.77 million.

Friday August 19:

The New Zealand economy will end the week by releasing its credit card spending at 03:00 GMT after the 0.4% reported rise in June.

NZD/USD Technical Analysis for August 12, 2011

The NZD/USD pair continued its wild swings on Thursday as the markets seem to run from one direction to another every 24 hours. The pair seems like it is in consolidation between 0.84 and 0.81 and could stay in that range for a little while. A break to either side runs into opposing forces just 100 pips away. Because of this, we are sitting out of this market until we can do analysis on Friday as to the longer-term look of it. If you are inclined to scalp the markets, this could be a good pair for you, depending on the spread you pay.

NZD/USD Daily Fundamental Analysis for August 12, 2011

The New Zealand dollar inclined for the first time against the dollar after heavy losses during last past period especially after the Standard & Poor’s cut reduced the US’s long-term credit rating. However kiwi recovered in a relief rally on the slight improvement for commodities and equities.

Commodities recovered slightly which supported the New Zealand dollar to gain versus greenback, also it increased after data showed consumer confidence rose.

On Friday, at 22:45 GMT, NZD retail sales Ex. inflation for the second quarter is due after the recorded 0.9% in the first quarter.

At 12:30 GMT, the U.S. economy will release the advanced retail sales for July, where the previous reading was 0.1% and expected to come at 0.4%. The University of Michigan confidence for August will be released at 09:55 GMT, where the preliminary reading is expected to come at 63.2 from the previous of 63.7.

The U.S. business inventories for June will be released at 10:00 GMT, where it had a previous of 1.0% and expected to come at 0.6%.

NZD/USD Technical Analysis August 11, 2011

NZD/USD fell hard on Wednesday as the markets around the world fell. The pair most certainly has plenty of support in the .80 area, and a bounce could come there, but we are starting to see that it is a bullish market that seems easy to knock back down. Because of this, we are starting to consider selling all rallies. Our advice is to let this market finish out the week, and then look at our weekly video for possible clues to the future direction of this pair as it appears to be at a crossroads of sorts now.