Daily Analysis For NZD/USD  14-06-2023

Daily Analysis For NZD/USD 14-06-2023

NZD/USD Analysis


Key Points: -

·       On Tuesday, the NZD/USD pair regained positive momentum and rose to its highest level in nearly three weeks. Several factors contributed to the weakness of the US Dollar and supported the upward movement of the pair.


·       Traders are currently focusing on the release of the US Consumer Price Index (CPI) for fresh market direction before the upcoming Federal Open Market Committee (FOMC) meeting on Wednesday.


·       The CPI data will provide important insights into inflation in the United States, which can have a significant impact on the future monetary policy decisions of the Federal Reserve.


Today's Scenario: -


NZD/USD pair experienced buying interest near the 0.6100 level and continued to rise during the first half of the European session, reaching a nearly three-week high around 0.6155. This upward movement was supported by renewed selling pressure on the US Dollar (USD).


The decline in the USD can be attributed to expectations that the Federal Reserve (Fed) will refrain from raising interest rates in June. Recent dovish comments from several FOMC members have increased speculation of a pause in the Fed's tightening cycle. As a result, US Treasury bond yields have dropped, putting downward pressure on the USD and providing a tailwind for the NZD/USD pair.


Additionally, the positive sentiment in equity markets has contributed to the weakness of the safe-haven USD, benefiting the risk-sensitive New Zealand Dollar (Kiwi). However, concerns about a global economic slowdown, particularly in China, may limit the optimism. Furthermore, surprise rate hikes by other major central banks, such as the Reserve Bank of Australia (RBA) and the Bank of Canada (BoC), have indicated that the fight against inflation is ongoing. This has led to speculations about another rate hike by the Fed in July.


The Reserve Bank of New Zealand (RBNZ) has signaled that it has completed its aggressive hiking cycle, which began in 1999. This, combined with the uncertainty surrounding the upcoming US consumer inflation figures, may deter bullish bets on the NZD/USD pair. Investors are likely to adopt a cautious approach and await the release of the US CPI report, which will have an impact on the Fed's next policy decision. The outcome of the two-day monetary policy meeting is scheduled to be announced on Wednesday and is highly anticipated by market participants.


Diagram of NZD/USD: -



Economic Events: -


Date      Event                                                                                            Impact        Currency

 02:00   (United States) API Crude Oil Stock Change                  Medium             USD

 04:15   (New Zealand) Current Account                                                  Medium NZD

 05:30   (New Zealand) Food Inflation YoY                                         Low NZD

 10:00   (Netherlands) Balance of Trade                                                          Low  EUR

 10:30   (Finland) Inflation Rate YoY                                                                 Low  EUR

 10:30   (Finland) Inflation Rate MoM                                                              Low  EUR

 10:30   (Finland) CPI                                                                                         Low     EUR

 11:30   (United Kingdom) GDP 3-Month Avg                                          Medium GBP

 11:30   (United Kingdom) Goods Trade Balance Non-EU                              High GBP

 11:30   (United Kingdom) Balance of Trade                                      Low GBP

 11:30   (United Kingdom) Construction Output YoY                       Low GBP

 11:30   (United Kingdom) Industrial Production YoY                       Low GBP

 11:30   (United Kingdom) Industrial Production MoM                            Medium             GBP

 11:30   (United Kingdom) Manufacturing Production YoY             Low GBP

 11:30   (United Kingdom) Manufacturing Production MoM    Medium            GBP

 11:30   (United Kingdom) Goods Trade Balance                                            High GBP

 11:30   (United Kingdom) GDP YoY                                                                 Low  GBP

 11:30   (United Kingdom) GDP MoM                                                             High  GBP

 11:30   (Germany) Wholesale Prices MoM                               Medium EUR

 11:30   (Germany) Wholesale Prices YoY                                  Medium EUR

 12:30   (China) FDI (YTD) YoY                                                                   Medium   CNY

 12:30   (Slovakia) Inflation Rate MoM                                                            Low  EUR

 12:30   (Slovakia) Inflation Rate YoY                                                                Low  EUR

 12:30   (Slovakia) Core Inflation Rate MoM                                      Low EUR

 12:30   (Slovakia) Core Inflation Rate YoY                                        Low EUR

 12:30   (Slovakia) CPI                                                                                      Low      EUR

 13:30   (France) IEA Oil Market Report                                                   Medium  EUR

 14:30   (Euro Area) Industrial Production MoM                                     Medium EUR

 14:30   (Euro Area) Industrial Production YoY                                              Low  EUR

 14:30   (Montenegro) GDP Growth Rate YoY                                                Low  EUR

 15:00   (Germany) 10-Year Bund Auction                               Medium  EUR

 15:30   (Portugal) Inflation Rate MoM                                                          Low    EUR

 15:30   (Portugal) Inflation Rate YoY                                                             Low    EUR

 15:30   (Portugal) CPI                                                                                     Low       EUR

 15:30   (Ireland) Residential Property Prices YoY                                          Low  EUR

 15:30   (Ireland) Residential Property Prices MoM                       Low EUR

 16:30   (United States) MBA 30-Year Mortgage Rate                Medium USD

 16:30   (United States) MBA Mortgage Applications                      Low USD

 16:30   (United States) MBA Mortgage Refinance Index                              Low USD

 16:30   (United States) MBA Mortgage Market Index                                  Low USD

 16:30   (United States) MBA Purchase Index                                                 Low  USD

 17:00   (United Kingdom) NIESR Monthly GDP Tracker                               Low GBP

 18:00   (Canada) New Motor Vehicle Sales                                     Low  CAD

 18:00   (United States) Core PPI MoM                                                  Medium    USD

 18:00   (United States) Core PPI YoY                                                             Low    USD

 18:00   (United States) PPI YoY                                                                      Low     USD

 18:00   (United States) PPI MoM                                                     High  USD

 20:00   (United States) EIA Heating Oil Stocks Change                                  Low USD

 20:00   (United States) EIA Refinery Crude Runs Change                              Low USD

 20:00   (United States) EIA Crude Oil Stocks Change               Medium USD

 20:00   (United States) EIA Distillate Stocks Change                      Low USD

 20:00   (United States) EIA Gasoline Production Change                             Low USD

 20:00   (United States) EIA Crude Oil Imports Change                                 Low USD

 20:00   (United States) EIA Gasoline Stocks Change                Medium USD

 20:00   (United States) EIA Cushing Crude Oil Stocks Change         Low              USD

 20:00   (United States) EIA Distillate Fuel Production Change         Low              USD

 21:00   (United States) 17-Week Bill Auction                                                 Low USD

 23:30   (United States) Fed Interest Rate Decision                          High              USD

 23:30   (United States) FOMC Economic Projections                        High              USD

 23:30   (United States) Interest Rate Projection - 1st Yr                           Medium            USD

 23:30   (United States) Interest Rate Projection - 2nd Yr                         Medium            USD

 23:30   (United States) Interest Rate Projection - Current        Medium            USD

 23:30   (United States) Interest Rate Projection - Longer                        Medium             USD



Buy Scenario: -


On the upside, the 200-SMA acts as an immediate resistance level near 0.6175. Beyond that, the 61.8% Fibonacci retracement level of the pair's downside move from May 19 to May 31, around 0.6185, will come into play, followed by the upper trend line of the mentioned channel near 0.6205, posing a challenge for the bulls. Till we do not advise to buy NZD/USD.


Sell Scenario: -


The failure to break above the 200-bar Simple Moving Average (SMA) and the overbought condition of the Relative Strength Index (RSI) (14) contribute to the pullback. However, there is still optimism among buyers due to the presence of an ascending trend channel that has been in place for a week.


The recent weakness in the pair could challenge the short-term bullish chart pattern, with the support level at 0.6130 in focus and further support expected around the 100-SMA at 0.6085. It's important to note that several levels marked since late May indicate that the buyers' last defense lies at 0.6030-25. Till we do not advise to sell NZD/USD.


Support and Resistance Level: -

 Support              Resistance  

 S1 0.6111   -      R1 0.6183

 S2 0.6072  -      R2 0.6216

 S3 0.6039  -      R3 0.6255


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