Photo - Andreas Zanin
Andreas Zanin
Analysis | September 1, 2021

NZD/USD & NZD/JPY: outlook and forecast

The New Zealand dollar has shown strength in recent weeks despite a further increase in coronavirus cases and a national lockdown but this has been offset by the view that the Reserve Bank of New Zealand (RBNZ) will increase interest rates at their October meeting. Below is our view of the fundamentals, sentiment, and technicals in relation to NZD/USD and NZD/JPY…

New Zealand to Hike Interest Rates in October?

“The RBNZ has recently delivered via commentary some strong hawkish signals that it will start hiking in October and a 50bp move cannot be ruled out.” (WESPAC) They might but the rate hike is now discounted and there is a strong chance in our view that rates will be kept on hold.

The NZD is heavily influenced by risk appetite and it’s been high recently but this looks likely to change in our view – traders have been too bullish of global growth and it’s now starting to slow up.

The Asian Economic Slow Up To Impact on the NZD

In terms of New Zealand, it’s heavily exposed to Asia in terms of trade and we are recently seeing a slow up in Asia in terms of PMI’s which are a leading economic health indicator. Below PMI data out China a major trading partner of New Zealand…

It’s not just China slowing up it’s happening all across the Pacific region. The NZD has bounced strongly but is there any more good news coming to push the NZD significantly higher? We don’t think so and with speculators heavily long the Kiwi, we think it could offer a good risk to reward short trade.

Technical Analysis

In terms of NZD/USD, we expect double trend line resistance to hold rallies and view the NZD as a sell into the levels on weakness or if we dont rally higher then its a sell on a break of support – we expect the whole recent rally to be retraced.

In terms of NZD/JPY, if we break above 78.00 we would look for the breakout to fail and sell back through the level with a stop behind 79.00. If we dont rally further we would sell back through todays low and look for the whole recent rally to be retraced.

 

Research provided by LearnCurrencyTradingOnline.com

The given data provided contains additional information, forecasts, analysis and market reviews published on the Key to Markets website.

Before making any investment decisions, you should know that:

– Key to Markets publishes analysis of any kind solely for information purposes and such analysis should not be construed as investment advice or a solicitation to buy or sell any financial instruments including without limitation CFDs.

– Key to Markets will not be liable for any loss or damage, which may arise, directly or indirectly from use of or reliance on the data provided by Key to Markets.

– Whilst all reasonable efforts are made to ensure that all content sources are reliable and that all information is presented, as far as possible, in a comprehensible, timely, accurate and complete manner, Key to Markets does not guarantee the accuracy or completeness of any information contained in the analysis.

– Past performance is not a guarantee of future results.

Latest Article
Improve your trading with a True ECN Broker
Trading account overview