Introduction

In this article NZDUSD will be analyzed both fundamentally and technically and as known nothing is impossible in Forex so different scenarios will be drawn to express about the most probable scenarios with the NZDUSD.

What is affected the move of NZDUSD nowadays:

Fundamental analysis:

NZDUSD is affected now by two different policies by both Reserve bank of New Zealand (RBNZ) and United States Federal Reserve (FED) and also affected strongly by commodity prices especially diary milk which strongly hit Kiwi in the last year, finally Kiwi and other currencies is affected due to strong growth in US in the last months which make US$ to be favored.

  • Different policies by RBNZ and FED:

RBNZ cut interest rate and is ready to do more as necessary, RBNZ cut interest rate to 2.25 from 2.50 this month in order to stop NZD appreciation.

In different, US FED has just raised interest rate for the first time from ten years, FED delayed its first rate hike more than once in order to prevent broad US$ gains which may dampen US growth, this time rate hike is very near but if something horrible hit markets again, more rate hike may be delayed more.

  • Diary milk prices collapse:

Kiwi was hit strongly due to collapse of commodities last year, Kiwi suffered hardly from losses of diary milk prices. Last year both milk and Kiwi were hit hardly.

Kiwi Chart :


  • Moderate US growth:

US growth still so strong in last quarter as it growth increase 3.7% in last quarter VS 0.6% quarter before, last US growth Q/Q were as follows (4.6%, 4.3%, 2.1%, 0.6% and 3.7%, 2% and 0.7% last quarter), US growth still moderate and accepted for FED.


Technical analysis:

  • Pair review :

NZDUSD Still move between 0.6150 and 0.6900 for the ninth month, after strong losses of last year, pair still consolidated below 0.7000 level, critical resistance of NZDUSD at 0.6900 should be clearly broken to support any long term recovery, 0.6100-0.6000 considered as ultimate support for the pair, pair is expected to move between 0.6000 and 0.7000 in the midterm view as delay of FED interest hike and no change of RBNZ view may support the pair to stay in the current range.


  • Different scenarios:
  1. NZDUSD will move between 0.6000 and 0.7000, this scenario may have probability 70%, this range worked for the last 9 months and is expected to work in the near time, FED is expected to delay interest rate due to slow down expectation, RBNZ is not able to cut more, this should support the pair to stay in range.
  2. NZDUSD will break higher 0.6900, this scenario may have probability 20%, if pair may break higher then it will reach 0.7300 directly before any consolidation or any reversal.
  3. NZDUSD will break lower 0.6000, any clear break below 0.6000 will send the pair strongly lower, this scenario may have probability 10%, this area worked strongly for the last months and it is not easy to be broken.
Conclusion:

NZDUSD still affected by different RBNZ and FED policies, diary milk prices strongly affected Kiwi, delay of FED interest hikes should support the pair to stay in the current range between 0.6100 and 0.6900.
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