New Zealand Dollar: NZD/USD (NZD=X) RBNZ Governor Adrian Orr Addresses Dairy Debt Situation
On Wednesday, the Reserve Bank of New Zealand (RBNZ) released its financial stability report. In its latest report, it said options to address excessive daily debt are limited as farm sales are at historically low levels.
The dairy sector has limited options to address its “overhang” of debt despite the fact that the current low interest rates should help many farmers to pay down debt, according to the RBNZ.
In its latest Financial Stability Report (FSR) released on Wednesday the RBNZ said that a number of banks are seeking to increase their margins by imposing fees for the provision of various facilities to farmers and through repricing higher-risk borrowers.
“This means that the most financially vulnerable farms are likely to see significant relief in their financing costs.”
The RBNZ also said it was important that banks seek to manage their own exposures to the dairy sector from a systemic risk perspective, it is also important that they continue to work constructively with farmers wherever possible.
RBNZ Governor Adrian Orr Addresses Dairy Debt Situation
RBNZ Governor Adrian Orr told the media conference on Wednesday that in respect to the dairy debt situation what he would like to see is “more equity and lots of alternatives of long term capital provision whether it be debt or equity into some of these sectors, particularly the dairy sectors.”
“So that will no doubt be part of a transition – obviously our capital proposals are all about allowing, enabling banks to be friends in good times and bad as well over the longer term. So these are long term transition issues.”
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 5 white candles and 5 black candles. During the past 50 bars, there have been 25 white candles and 25 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 62.4999. This is not an overbought or oversold reading. The last signal was a sell 5 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 55.56. 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 48 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 60. This is not a topping or bottoming area. The last signal was a buy 13 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 8 period(s) ago.
Rex Takasugi – TD Profile
FOREX NZD= closed down -0.000 at 0.642. Volume was 30% below average (neutral) and Bollinger Bands were 42% narrower than normal.
Open High Low Close Volume___
0.642 0.643 0.640 0.642 22,141
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.64 0.64 0.65
Volatility: 4 8 8
Volume: 25,301 30,448 35,324
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 2.0% below 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 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 34 periods.