New Zealand Dollar: NZD/USD (NZD=X) RBNZ looks to have gone full-blown dovish with more talks of negative rates and unconventional policies today

New Zealand Dollar: NZD/USD (NZD=X) RBNZ looks to have gone full-blown dovish with more talks of negative rates and unconventional policies today

New Zealand Dollar: NZD/USD (NZD=X) RBNZ looks to have gone full-blown dovish with more talks of negative rates and unconventional policies today

The pair is looking to snap a run of ten consecutive daily losses today as the kiwi is holding firmer after the drop following the RBNZ decision to cut its OCR by 50 bps yesterday. The risk mood is helping alleviate some pressure off the pair as the yuan trades higher.

Of note, price closed above the October 2018 low @ 0.6425 yesterday despite having fallen to its weakest level since January 2016 at one point – below the 0.6400 handle.

However, the outlook is still suggestive that the path of least resistance for the kiwi moving forward is for price to head lower.

The RBNZ looks to have gone full-blown dovish with more talks of negative rates and unconventional policies today and quite frankly, I just don’t see the more cheerful risk mood staying the course as US-China trade tensions continue to drag on.

Add to the fact that global central banks are now in a race to the bottom to deal with core issues i.e. weakening economy and slowing inflation, it’s hard to see markets not get spooked off by the prospects of a pseudo-currency war of sorts.

However, with the dollar itself caught in the crossfire of a trade war, perhaps NZD/JPY may present a better opportunity to ride on any kiwi weakness. Especially with price looking to fall off a cliff past key support levels seen in recent years.

Technical Indicators

Overall, the bias in prices is: Downwards.

The projected upper bound is: 0.66.

The projected lower bound is: 0.64.

The projected closing price is: 0.65.

Candlesticks

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 27 white candles and 22 black candles for a net of 5 white candles.

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 42.1053. This is not an overbought or oversold reading. The last signal was a buy 4 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 31.56. 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 1 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 -99. This is not a topping or bottoming area. The last signal was a buy 0 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 sell 11 period(s) ago.

Rex Takasugi – TD Profile

FOREX NZD= closed down -0.001 at 0.647. Volume was 99% below average (consolidating) and Bollinger Bands were 93% wider than normal.

Open     High      Low     Close     Volume___
0.648 0.648 0.646 0.647 416
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 0.65 0.66 0.67
Volatility: 9 10 10
Volume: 35,128 36,323 42,118

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 3.7% below its 200-period moving average and is in an downward trend. Volatility is high 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 bearish on NZD= and have had this outlook for the last 8 periods.

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