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10 Feb 2015
NZD/USD: Retesting 0.7440 resistance, US NFP losses erased
FXStreet (Bali) - NZD/USD has made a startling recovery post the stellar US NFP report, and after losing over 1 cent on Friday, setting its lowest at 0.7330, the rate accumulated enough bids on Monday to see a key resistance at 0.7440 being retested, before easing off towards 0.7400/10, where the 20-hourly MA crosses.
The Kiwi saw a steady recovery throughout the day, with talk of reserve manager bids in AUD likely assisting NZD due to its reserve status as well. Earlier in Asia, we learnt yet another positive input for the NZD fundamentals story, even if it didn't have any price impact, with New Zealand truckometer coming in at +0.9% vs 3.4% prior, suggesting that the growth trend in the country continues to maintain its momentum.
Sharon Zollner, Senior Economist at ANZ, notes: "The two indexes suggest the economy continues to have plenty of momentum. The ANZ Heavy Traffic Index lifted 0.9% in January on top of a 3.4% lift in December (seasonally adjusted). The ANZ Light Traffic Index leads GDP by six months. It was flat in January, holding onto its 2% December gain (sa)."
In terms of monetary policies in New Zealand, last week, the market was reassured that the RBNZ had no immediate intentions of lowering the current 3.5% interest rate despite the global easing trends, following a speech by RBNZ Governor Wheeler. The language/wording used by Wheeler was an important piece in the NZD puzzle that needed some clarification, especially after last month's policy statement, in which the RBNZ finally decided to drop an explicit tightening bias.
As long as the RBNZ remains in a neutral bias and the New Zealand economy does not show signs of slowing down or unexpected decreases in inflation, there seems to be little negative drivers for the Kiwi, barring bouts of risk aversion in the market, which should see the currency continue to find decent buying interest as the NZ growth story keeps on going.
Technically, Jim Langlands, Founder at FXCharts, notes: "The ST indicators suggest that there could be further gains ahead, although there is some decent resistance right ahead, being both last Wednesday’s and also Friday’s high of 0.7445, and which is also strong Fibo resistance (38.2% of 0.7887/0.7175). A break of this area would accelerate towards 0.7500, but which seems unlikely to be seen in today. The downside will see bids today at 0.7400 and then at the 100 HMA (0.73850 and at the 200 HMA (0.7335). I don’t really see the Kiwi down here today, but if wrong, look for a run to 0.7300."
The Kiwi saw a steady recovery throughout the day, with talk of reserve manager bids in AUD likely assisting NZD due to its reserve status as well. Earlier in Asia, we learnt yet another positive input for the NZD fundamentals story, even if it didn't have any price impact, with New Zealand truckometer coming in at +0.9% vs 3.4% prior, suggesting that the growth trend in the country continues to maintain its momentum.
Sharon Zollner, Senior Economist at ANZ, notes: "The two indexes suggest the economy continues to have plenty of momentum. The ANZ Heavy Traffic Index lifted 0.9% in January on top of a 3.4% lift in December (seasonally adjusted). The ANZ Light Traffic Index leads GDP by six months. It was flat in January, holding onto its 2% December gain (sa)."
In terms of monetary policies in New Zealand, last week, the market was reassured that the RBNZ had no immediate intentions of lowering the current 3.5% interest rate despite the global easing trends, following a speech by RBNZ Governor Wheeler. The language/wording used by Wheeler was an important piece in the NZD puzzle that needed some clarification, especially after last month's policy statement, in which the RBNZ finally decided to drop an explicit tightening bias.
As long as the RBNZ remains in a neutral bias and the New Zealand economy does not show signs of slowing down or unexpected decreases in inflation, there seems to be little negative drivers for the Kiwi, barring bouts of risk aversion in the market, which should see the currency continue to find decent buying interest as the NZ growth story keeps on going.
Technically, Jim Langlands, Founder at FXCharts, notes: "The ST indicators suggest that there could be further gains ahead, although there is some decent resistance right ahead, being both last Wednesday’s and also Friday’s high of 0.7445, and which is also strong Fibo resistance (38.2% of 0.7887/0.7175). A break of this area would accelerate towards 0.7500, but which seems unlikely to be seen in today. The downside will see bids today at 0.7400 and then at the 100 HMA (0.73850 and at the 200 HMA (0.7335). I don’t really see the Kiwi down here today, but if wrong, look for a run to 0.7300."