New Zealand Dollar: NZD/USD (NZD=X) stalls as US-China deal awaited
The New Zealand dollar remained stalled amid increasingly positive signs the US and China will soon sign a preliminary trade deal and after Federal Reserve chair Jerome Powell made it clear further US interest rate cuts are unlikely.
Overnight, New Zealand time, US President Donald Trump said the two countries are in the “final throes” of hashing out a deal.
That was after US Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He discussed progress in the talks in a phone call Monday.
The two sides reached consensus on how to resolve core concerns, China’s Commerce Ministry said in its official readout of the call.
Meanwhile, Powell said that US monetary policy is now “well-positioned to support a strong labour market” and return inflation to the Fed’s 2 per cent target.
“At this point in the long expansion, I see the glass as much more than half full.”
In New Zealand, the Reserve Bank decided to leave its loan-to-value ratio restrictions in place on bank mortgage lending when it released its latest financial stability report.
Rudings says another rate cut in New Zealand is also looking less likely and the market has priced in only a 24 per cent chance RBNZ will cut its official cash rate when it next reviews monetary policy on February 12.
By contrast, the market is pricing in a 66 per cent chance of the Reserve Bank of Australia cutting its cash rate in February, he says.
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 67.5862. This is not an overbought or oversold reading. The last signal was a sell 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 57.04. 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 47 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 85. This is not a topping or bottoming area. The last signal was a buy 12 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 7 period(s) ago.
Rex Takasugi – TD Profile
FOREX NZD= closed down -0.000 at 0.642. Volume was 26% below average (neutral) and Bollinger Bands were 43% narrower than normal.
Open High Low Close Volume___
0.643 0.643 0.641 0.642 23,214
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 0.64 0.63 0.66
Volatility: 5 8 9
Volume: 25,638 30,615 35,472
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 33 periods.