Daily Analysis For NZD/USD  15-06-2023

Daily Analysis For NZD/USD 15-06-2023

NZD/USD Analysis


Key Points: -

·       The NZD/USD pair continues to decline from its multi-week high as it faces pressure from various factors.


·       The Kiwi is particularly impacted by a technical recession in New Zealand and weaker macroeconomic data from China.


·       Additionally, the Federal Reserve's indication of further interest rate increases supports the US Dollar and adds to the downward slide of NZD/USD.


Today's Scenario: -


The NZD/USD pair is experiencing significant selling pressure in the Asian session on Thursday, extending its retreat from a three-week high reached around the 0.6235 level the previous day. The pair maintains its bearish tone following the release of mostly disappointing macroeconomic data from China. Currently trading around the 0.6165-0.6170 region, the pair is down more than 0.60% for the day.


The latest data from China's National Bureau of Statistics (NBS) reveals that Retail Sales in May grew by 12.7% YoY, falling short of the anticipated 13.6% growth and the previous month's 18.4% increase. Additionally, China's Industrial Production for the same period came in at 3.5% YoY, lower than the estimated 3.6% and the previous reading of 5.6%. Furthermore, Fixed Asset Investment in May increased by 4.0% YTD YoY, missing the expected 4.4% and down from the previous 4.7%. These figures raise concerns about slowing economic growth in the world's largest economy and weigh on currencies such as the Kiwi.


The New Zealand Dollar (NZD) is further undermined by disappointing domestic data, indicating a contraction of 0.1% in the first quarter and pushing the economy into a technical recession. The Reserve Bank of New Zealand (RBNZ) has also signaled that it has concluded its most aggressive hiking cycle since 1999, contributing to aggressive selling pressure on the NZD/USD pair. Additionally, the modest strength of the US Dollar (USD) is another factor that adds to the bearish sentiment surrounding the major currency pair.


The USD Index (DXY), which measures the performance of the US Dollar against a basket of currencies, has rebounded from a one-month low following the Federal Reserve's (Fed) hawkish outlook and its intention to resume the rate-hiking cycle. The Fed has indicated that borrowing costs will likely increase by another 50 basis points by the end of December. Market participants have swiftly adjusted their expectations, now pricing in a higher probability of a 25 basis point rate hike in July. This supports the US Dollar and puts pressure on the NZD/USD pair.


Given the fundamental backdrop, the bias appears to favor bearish traders. From a technical standpoint, the failure near the significant 200-day Simple Moving Average (SMA) suggests that the path of least resistance for the NZD/USD pair is to the downside. Traders will now look to key US economic data, including monthly Retail Sales, Weekly Initial Jobless Claims, the Empire State Manufacturing Index, the Philly Fed Manufacturing Index, and Industrial Production figures, for fresh market direction during the early North American session.


Diagram of NZD/USD: -


Economic Events: -


Date      Event                                                                                            Impact        Currency

0:00      (United States) Fed Press Conference                                              High  USD

4:15      (New Zealand) GDP Growth Rate YoY                                         Medium NZD

4:15      (New Zealand) GDP Growth Rate QoQ                                       Medium NZD

5:20      (Japan) Foreign Bond Investment                                       Low  JPY

5:20      (Japan) Stock Investment by Foreigners                                           Low  JPY

5:20      (Japan) Machinery Orders YoY                                                   Medium   JPY

5:20      (Japan) Machinery Orders MoM                                               Medium   JPY

5:20      (Japan) Imports YoY                                                                           Low     JPY

5:20      (Japan) Balance of Trade                                                    High    JPY

5:20      (Japan) Exports YoY                                                                    Medium     JPY

5:30      (Euro Area) Eurogroup Meeting                                                Medium   EUR

7:00      (Australia) Consumer Inflation Expectations                      Low AUD

7:00      (Australia) Part Time Employment Chg                                      Medium AUD

7:00      (Australia) Participation Rate                                                             Low   AUD

7:00      (Australia) Full Time Employment Chg                                       Medium AUD

7:00      (Australia) Unemployment Rate                                                       High   AUD

7:00      (Australia) Employment Change                                                       High   AUD

7:00      (Australia) RBA Bulletin                                                              Medium    AUD

7:00      (China) PBoC 1-Year MLF Announcement                         Low CNY

7:00      (China) House Price Index YoY                                                     Medium  CNY

7:30      (China) Unemployment Rate                                                            High   CNY

7:30      (China) Retail Sales YoY                                                                      High    CNY

7:30      (China) Industrial Production YoY                                       High CNY

7:30      (China) Fixed Asset Investment (YTD) YoY                   Medium CNY

9:05      (Japan) 3-Month Bill Auction                                                              Low  JPY

10:00    (Japan) Tertiary Industry Index MoM                                                  Low JPY

10:00    (Netherlands) Unemployment Rate                                Medium EUR

10:30    (Finland) GDP YoY                                                                                 Low   EUR

12:00    (Switzerland) Producer & Import Prices MoM                                  Low CHF

12:00    (Switzerland) Producer & Import Prices YoY                       Low CHF

12:15    (France) Inflation Rate MoM                                                      Medium   EUR

12:15    (France) Inflation Rate YoY                                                         Medium   EUR

12:15    (France) Harmonised Inflation Rate MoM                         Low EUR

12:15    (France) Harmonised Inflation Rate YoY                                           Low  EUR

13:30    (Spain) Balance of Trade                                                             Medium    EUR

14:10    (Spain) Obligacion Auction                                                    Low   EUR

14:10    (Spain) Bonos Auction                                                                        Low    EUR

14:30    (Euro Area) Balance of Trade                                                      Medium  EUR

14:30    (France) 5-Year OAT Auction                                                               Low  EUR

14:30    (France) 3-Year OAT Auction                                                               Low  EUR

14:30    (Greece) Construction Output YoY                                      Low EUR

14:30    (Montenegro) Inflation Rate YoY                                                       Low   EUR

14:30    (Montenegro) Harmonised Inflation Rate YoY                                  Low EUR

14:30    (Montenegro) Inflation Rate MoM                                     Low  EUR

15:00    (Belgium) Construction Output YoY                                     Low  EUR

15:30    (France) 10-Year Index-Linked OAT Auction                       Low EUR

15:30    (Ireland) Balance of Trade                                                    Low   EUR

16:00    (Portugal) Economic Activity YoY                                                      Low   EUR

16:00    (Portugal) Private Consumption YoY                                                  Low EUR

17:45    (Canada) Housing Starts                                                              Medium   CAD

17:45    (Euro Area) ECB Interest Rate Decision                                            High  EUR

17:45    (Euro Area) Marginal Lending Rate                                     Low  EUR

17:45    (Euro Area) Deposit Facility Rate                                                      High   EUR

18:00    (Canada) Manufacturing Sales MoM                                                Low  CAD

18:00    (United States) Import Prices YoY                                       Low  USD

18:00    (United States) Export Prices YoY                                       Low  USD

18:00    (United States) Import Prices MoM                               Medium USD

18:00    (United States) Export Prices MoM                             Medium  USD

18:00    (United States) NY Empire State Manufacturing Index              Medium USD

18:00    (United States) Retail Sales YoY                                                       High    USD

18:00    (United States) Retail Sales Ex Autos MoM                      High USD

18:00    (United States) Retail Sales MoM                                      High  USD

18:00    (United States) Philly Fed Business Conditions                                Low USD

18:00    (United States) Philly Fed Employment                                            Low  USD

18:00    (United States) Philly Fed CAPEX Index                                             Low  USD

18:00    (United States) Philly Fed Prices Paid                                                Low  USD

18:00    (United States) Philly Fed New Orders                                              Low  USD

18:00    (United States) Philadelphia Fed Manufacturing Index              Medium             USD

18:00    (United States) Jobless Claims 4-week Average                              High USD

18:00    (United States) Continuing Jobless Claims                        High USD

18:00    (United States) Initial Jobless Claims                                                High  USD

18:00    (United States) Retail Sales Ex Gas/Autos MoM                             High USD

18:15    (Euro Area) ECB Press Conference                                     High  EUR

18:30    (Belgium) Balance of Trade                                                                Low    EUR

18:30    (Kosovo) GDP Growth Rate YoY                                                        Low    EUR

18:45    (United States) Capacity Utilization                                     Low  USD

18:45    (United States) Manufacturing Production YoY                               Low USD

18:45    (United States) Industrial Production YoY                  Medium USD

18:45    (United States) Industrial Production MoM               Medium USD

18:45    (United States) Manufacturing Production MoM                            Low USD

19:30    (United States) Business Inventories MoM                Medium USD

19:30    (United States) Retail Inventories Ex Autos MoM                            Low USD

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

21:00    (United States) 8-Week Bill Auction                                     Low  USD

21:00    (United States) 4-Week Bill Auction                                     Low  USD

21:05    (United Kingdom) BoE Cunliffe Speech                                             Low  GBP

21:30    (Canada) 2-Year Bond Auction                                                          Low    CAD

21:30    (United States) 15-Year Mortgage Rate                                            Low  USD

21:30    (United States) 30-Year Mortgage Rate                                            Low  USD



Buy Scenario: -


On the technical front, the NZD/USD pair has faced strong resistance near the 61.8% Fibonacci retracement level (drawn from the high of 0.6385 on May 11 to the low of 0.5985 on May 31) at 0.6230 on the four-hour chart. The downward-sloping trendline from the May 11 high at 0.6385 continues to act as support for Kiwi bulls. Additionally, the 20-period Exponential Moving Average (EMA) at 0.6161 is providing a cushion for Kiwi buyers.


The Relative Strength Index (RSI) (14) is currently within the bullish range of 60.0-80.0, indicating a positive bias for the Kiwi.


If the NZD/USD pair successfully breaks above the round-level resistance at 0.6200, it could move towards the high of May 17 at 0.6261, followed by the high of May 19 at 0.6306. Till we do not advise to buy NZD/USD.


Sell Scenario: -


On the downside, if the pair falls below the intraday low at 0.6015, it could reach a fresh six-month low towards the low of November 11, 2022, at 0.5984. Further downside movement could expose the pair to the high of November 2, 2022, at 0.5941. Till we do not advise to sell NZD/USD.


Support and Resistance Level: -

 Support              Resistance  

 S1 0.6147   -     R1 0.6251

 S2 0.6089   -      R2 0.6295

 S3 0.6044  -      R3 0.6354


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