New Zealand Dollar: NZD/USD (NZD=X) only up on US dollar weakness after the manufacturing data
The New Zealand dollar was treading water after gaining on US dollar weakness when soft data added to concerns that the US-China trade war is negatively impacting the US economy.
The kiwi was trading at 62.46 US cents at 5:30 pm in Wellington versus 62.44 US cents at 8am. The trade-weighted index was at 69.84 from 69.88.
The US dollar took a tumble when the Institute for Supply Management’s factory index slipped to 47.8 in September, the lowest since June 2009 and was below expectations for 50.4.
Westpac Bank senior strategist Imre Speizer said, however, any lift in the kiwi will likely be short lived, in particular ahead of likely rate cuts from the central bank.
The Reserve Bank “has demonstrated its willingness to take bold steps, which means markets are likely to remain dovishly positioned for some time,” he said in a note. The US Federal Reserve, in contrast, is more measured. As a result the rate differential is likely to weigh on the kiwi.
He also said slowing global growth and trade wars will be headwinds. “All this suggests further downside potential for NZD/USD, with 0.6130 possible over the next few months.”
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 0.64.
The projected upper bound is: 0.63.
The projected lower bound is: 0.62.
The projected closing price is: 0.63.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black 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 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 46.5788. This is not an overbought or oversold reading. The last signal was a buy 7 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 39.22. 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 8 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 -66. This is not a topping or bottoming area. The last signal was a buy 0 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 sell 10 period(s) ago.
Rex Takasugi – TD Profile
FOREX NZD= closed up 0.000 at 0.627. Volume was 100% below average (consolidating) and Bollinger Bands were 5% wider than normal.
Open High Low Close Volume___
0.627 0.627 0.627 0.627 60
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.63 0.64 0.66
Volatility: 9 8 9
Volume: 30,207 32,165 38,301
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 5.5% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of NZD= (mildly bearish). Our trend forecasting oscillators are currently bearish on NZD= and have had this outlook for the last 8 periods.
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