The Kiwi dollar has climbed higher following a stronger than expected Chinese trade balance which was published around 10:05 SGT (9.05 am EDT). Although China is the second on the list of New Zealand exports destinations, it remains extremely important because it contributes almost 19% of total exports. In addition, China is the first destination for Australian exports, which is also the largest trading partner of New Zealand. As such, an improvement in the Chinese economy will improve Australia and New Zealand directly and indirectly.
Time Table
The rally NZD / USD is also quite fast, as prices were paring gains made overnight during the US session as risk appetite was generally bullish after Yellen made her first daughter monetary policy address in the ability of the Fed Chairman. This early decline is not surprising that what Yellen said really does not inspire confidence in the US recovery, nor give hope as she opened her speech in the House saying that she is here to continue where Bernanke left (read: more candles come).
Therefore, although NZD / USD is not moving, the risk of a downturn was still there. In addition, there are additional technical downward pressure with Top Channel downward pressure and the opening of a movement toward the channel bottom, while the Stochastic indicator favors a bearish even with Stoch and lines signals of both lower score after being capped Channel Top.
Therefore, Chinese data helped negate downside pressure, but S / T downward pressure remains so. Stochastic readings has since moved up in the overbought region and is now giving us the first signs of a bearish signal, while the same Top Channel is still capping gains. As such, do not be surprised if bearishness yields and Bottom channel will remain a viable target if the flexible support 0.834 is broken.
Table Daily
daily chart is more optimistic if, as the movement continues 0.840. However, the ability to break 0.84 remains in doubt that the momentum is already overbought and the pace of upside gains is definitely slower than when prices were around 0815 - after invalidating fresh attempt bearish breakout. In addition, although NZD is expected to strengthen over the next 1-2 years on rate hikes from the RBNZ, USD is expected to strengthen as well, resulting in a sideways trend is most likely developed as opposed to a pure and single or downward trend. In addition, recent rallies seems to be aided by a surprising weakening of USD. With US stocks begin to return to the bullish channel, we saw foreign funds returning again in America and which will result in further strengthening USD above the natural appreciation due to QE tapering. As such, it will not be an easy journey for NZD / USD still climb above 0.84 unless something fundamentally changes once more (for example, the revision of the objective of increased RBNZ rate of 2.25%)
More links:
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GBP / USD - Works for Trouble at 1 , 6450 resistance Level
AUD / USD - to remain well above 0.0 Key Level
This article is only for general information purposes . It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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Read More : NZD/USD Technicals – Clambering Higher On Stronger Chinese Trade Data
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