New Zealand Dollar: NZD/USD (NZD=X) downside risks related to trade activity have intensified

New Zealand Dollar: NZD/USD (NZD=X) downside risks related to trade activity have intensified

New Zealand Dollar: NZD/USD (NZD=X) downside risks related to trade activity have intensified

The Reserve Bank of New Zealand (RBNZ) held interest rates steady on June 26, but said further cuts to borrowing costs may be needed given growing economic risks at home and abroad.

The RBNZ kept the official cash rate (OCR) at a record low of 1.50%, as expected, and in a strikingly dovish statement warned that a global slowdown is hurting the domestic economy amid intensifying trade risks.

“The global economic outlook has weakened, and downside risks related to trade activity have intensified,” the RBNZ said.

“Given the downside risks around the employment and inflation outlook, a lower OCR may be needed,” it said, having lowered the cash rate by 25 basis points at their last meeting in May.

Speculative buyers didn’t seem to care that the RBNZ was indicating a likely rate cut in the OCR in August and perhaps a 1.00% rate by the end of the year.

Overall, the bias in prices is: Upwards.

The projected upper bound is: 0.68.

The projected lower bound is: 0.66.

The projected closing price is: 0.67.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 9 white candles and 1 black candles for a net of 8 white candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 96.4707. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 8 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 68.60. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 27 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 134.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 9 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 6 period(s) ago.

Rex Takasugi – TD Profile

FOREX NZD= closed up 0.001 at 0.672. Volume was 97% below average (consolidating) and Bollinger Bands were 37% wider than normal.

Open High Low Close Volume___
0.672 0.673 0.671 0.672 985

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period     50-period     200-period
Close: 0.66 0.66 0.67
Volatility: 4 8 10
Volume: 35,267 35,512 44,437

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FOREX NZD= is currently 0.2% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into NZD= (mildly bullish). Our trend forecasting oscillators are currently bullish on NZD= and have had this outlook for the last 7 periods.

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