Fundamental Analysis of NZD/USD for August 9, 2018
NZD/USD is currently quite impulsive with the bearish momentum which is expected to lead the price towards 0.65 in the coming days. Despite the unchanged economic reports, the dovish nature of the Monetary Policy and Rate statement made NZD lose certain momentum against USD which is expected to lead to further weakness in the process.
Today NZD Official Cash Rate report was published unchanged at 1.75% which did impact the Rate Statement outcome leading to a certain sentiment shift in the market leading to further weakness of NZD against USD in the process. As of the Governor Adrian Orr’s statement today at RBNZ Press Conference, the rate is expected to be unchanged for longer which is done for the stronger economic growth but the market did not quite respond to it positively which is indeed an alarm for the NZD buyers to shift their bias.
On the other hand, Ahead of the CPI report to be published tomorrow, today PPI report is going to be published which is expected to decrease to 0.2% from the previous value of 0.3%, Core PPI is expected to decrease to 0.2% from the previous value of 0.3%, Unemployment Claims is expected to increase with negative impact to 220k from the previous figure of 218k and Final Wholesale Inventories is expected to be unchanged at 0.0%.
As of the current scenario, NZD is expected lose further momentum against USD gradually in the coming days as of the recent dovish statement from the RBNZ officials about the upcoming plans for the economy suggested. Though the real time impact was quite large but it is expected to take a certain amount of time to push the NZD weakness to a certain peak before USD can actually push it more impulsively in the process.
Now let us look at the technical view. The Ichimoku Context is suggesting the price should push much lower whereas certain bullish intervention is also expected as the price proceeds much lower towards 0.65 support area in the future. As of the current structure, the price is expected to push a bit higher towards 0.6720 area where the dynamic levels like 20 EMA, Tenkan and Kijun line will meet the price for the confluence to push further lower in the coming days. As the price remains below 0.6850 area, the bearish bias is expected to continue further.
RESISTANCE: 0.6720, 0.6850
MOMENTUM: IMPULSIVE AND NON-VOLATILE