NZD/USD Forecast Aug. 29 – Sep. 2

The New Zealand dollar tried reaching new highs and had a struggle, moving just a bit higher. Is this break real? 3 events are on the agenda this week. Here is an analysis of fundamentals and an updated technical analysis for NZD/USD.

New Zealand saw a trade balance deficit of 433 million, worse than expected. This weighed on the kiwi dollar. In the US, new home sales beat expectations. The mixed messages in Jackson Hole caused a wobble, but the kiwi managed to push through and reach higher ground.

Updates:

NZD/USD daily graph with support and resistance lines on it. Click to enlarge:

Building Consents: Monday, 22:45. This gauge of the housing sector has been volatile of late. A jump of 1.6.3% last time. A drop could be seen now.

ANZ Business Confidence: Wednesday, 1:00. The indicator dropped to 16 points in July, after a few months of rises. Will it continue dropping now?

Overseas Trade Index: Wednesday, 22:45, The indicator, also known as Terms of Trade, jumped 4.4% in Q1. In Q2, we could see a slide. The RBNZ watches this number closely.

NZD/USD Technical Analysis

Kiwi/dollar made an attempt to rise above resistance at 0.7330 mentioned last week but fell back down.

Technical lines, from top to bottom:

The round number of 0.74 served as resistance and support back in 2015. 0.7330 is the high of 2016 so far.

0.7290 was the pre-Brexit peak and serves as high resistance. The next line is 0.7240 which capped the pair in July 2016.

0.7160 worked as support when the kiwi was trading on the much higher ground in 2014. 0.7050 was the peak in April 2015.

The round level of 0.70 is still important because of its roundness but it isn’t really strong. The low of 0.6940 allowed for a temporary bounce.

The round 0.69 level has switched positions to resistance. 0.6840 capped the pair during May 2016 and tops the range. 0.6720 is the low seen in May 2016 more than once providing the lower bound.