New Zealand Dollar: NZD/USD (NZD=X) Early Price Action Suggests Investor Indecision
The Australian and New Zealand Dollars are trading higher on Friday, reversing yesterday’s weakness. The choppy price action this week reflects investor uncertainty over whether the United States and China will sign some sort of trade agreement in the coming weeks.
During the week, the Aussie and Kiwi were manipulated by reports of a snag in the negotiations over the rollback of tariffs, a delay in the deal until early 2020 and China’s condemnation of U.S. legislation supporting the pro-democracy protesters in Hong Kong.
At 09:16 GMT, the AUD/USD is trading .6792, up 0.0004 or +0.06% and the NZD/USD is at .6417, up 0.0016 or 0.24%.
At the end of the week, however, a report from The Wall Street Journal saying that China had invited the U.S. Trade Representative and Treasury Secretary to Beijing for further talks, provided some support.
Although the Reserve Bank of Australia (RBA) is scheduled to meet on December 3 as of November 22, there is only a 22% chance of an interest rate cut. So there is no rate cut pressure on the Australian Dollar.
After the Reserve Bank of New Zealand (RBNZ) surprised investors by keeping rates on hold earlier in the month, the NZD/USD has stagnated. It’s not likely to move until there is a major breakthrough with the trade deal, or until the major bank’s figure out the central bank’s next move.
On the data front, manufacturing PMI (Purchasing Managers’ Index) and Services PMI figures for November will be released at 14:45 GMT. Consumer sentiment for November and the latest Kansas City Fed Survey will follow slightly later in the session.
Investors will also have the opportunity to react to comments from Federal Reserve Bank of New York President John Williams on Friday morning.
After this week’s slew of positive and negative remarks over a U.S.-China trade deal, things are quiet on Friday. This is leading to the inside trade on the AUD/USD and NZD/USD daily charts. This pattern tends to indicate investor indecision and impending volatility.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 0.64.
The projected upper bound is: 0.65.
The projected lower bound is: 0.63.
The projected closing price is: 0.64.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 24 white candles and 26 black candles for a net of 2 black candles.
An engulfing bearish line occurred (where a black candle’s real body completely contains the previous white candle’s real body). The engulfing bearish pattern is bearish during an uptrend (which appears to be the case with FOREX NZD=). It then signifies that the momentum may be shifting from the bulls to the bears.
If the engulfing bearish pattern occurs during a downtrend, it may be a last engulfing bottom which indicates a bullish reversal. The test to see if this is the case is if the next candle closes above the bottom the current (black) candle’s real body.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 43.6462. This is not an overbought or oversold reading. The last signal was a sell 2 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 53.64. 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 45 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 57. This is not a topping or bottoming area. The last signal was a buy 10 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX NZD= closed down -0.001 at 0.640. Volume was 100% below average (consolidating) and Bollinger Bands were 45% narrower than normal.
Open High Low Close Volume___
0.641 0.641 0.640 0.640 152
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.64 0.63 0.66
Volatility: 10 8 9
Volume: 23,718 30,133 35,521
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.
FOREX NZD= is currently 2.4% below its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of NZD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on NZD= and have had this outlook for the last 31 periods.
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