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NZD/USD Falls in Anticipation of Next Week's RBNZ Meeting

Many of the USD-crosses are at the crossroad this week. For the most part, an initial bout of USD-strength has been faded by the Tuesday session as EUR/USD reversed its initial plunge and the USD/JPY falls below June's consolidation range.

However, the NZD/USD shows a steady decline. 

NZD/USD 4H Chart 6/30
(click to enlarge)

In the 4H chat we can see a persistent downtrend. Other than the obvious price action, here are some other clues:
1) Price is holding under the 200-, 100-, and 50-period simple moving averages. 
2) The RSI has tagged below 30 and held below 60 for the most part. 

Today (6/30), price is clearing the 0.68 handle and heading towards the 0.67 level. The daily chart displays a clear falling channel.

NZD/USD Daily Chart 6/30
(click to enlarge)

The near-term fundamental factor could be a poor ANZ Business Confidence reading of -2.3 for June. It has been steadily falling since the beginning of 2014: After a brief rebound in Q4, it began to slide again as shown in the historic chart of this indicator:

ANZ Business Confidence


(click to enlarge; source: forexfactory.com)

Now, the overall reason NZD/USD is falling is because of the divergent monetary policy stance between the RBNZ and the Fed. While the RBNZ is expected to slash its official cash rate of 3.50% to 3.25% next week, the Fed is looking to raise rates by the end of this year, if economic and inflation data permits. With this scenario, the NZD/USD might be bearish until the rate cut, after which the market might need to take a breather and assess the RBNZ's tone to see if more rates cuts are coming, or if the central bank will start holding. 

For now, when we look at the monthly chart, we can see that the 0.65 handl up to the 0.6560 support pivot and 2010-low will be the short-term target for this week. 

NZD/USD Monthly Chart 6/30
(click to enlarge)