Directfx admin

Recent NZD momentum has dulled, and the New Zealand Dollar (NZD) is back trading in a risk off tone against the US Dollar (USD). Last week’s 0.6200 top has been replaced by downside bias to 0.6100 as markets go back to risk off and the buzz around softer US inflation data fades. With the world cup kicking off and the US Thanksgiving holiday in effect until the end of the week conditions should be a little thin with increased volatility. Looking ahead we have the RBNZ rate announcement and statement with predictions the central bank will hike a further 0.75% to 4.25%. The Fed’s Mester has been on the wires saying the Fed is nowhere near finished with hiking rates to achieve their magical 2.0% inflation target but may be in a position to slow down increases at the December meeting. Technically the uptrend remains in the cross.

Current Level: 0.6095
Resistance: 0.6440
Support: 0.5830
Last Weeks Range: 0.6051-0.6205

Market Overview:

Key Points:

• Further lockdown concerns in China are causing investors to buy the safe-haven USD Dollar this week
• Crude Oil trades at a 2-month low at 80.06
• Hong Kong’s leader John Lee has tested positive 1 day after meeting with Xi Jinping at a summit in Thailand
• Both Australia and New Zealand’s housing markets continue to tank, Australia’s medium house price fall 1.2% in October while NZ is -10.9% lower year on year.
• The IMF are predicting the global economy will get “gloomier” particularly in Europe next year with economic activity expected to contract while inflation remains extremely high
• The British Pound (GBP) was the strongest currency last week while the Australian Dollar (AUD) was the worst performer. Read more

Tuesday 22/11
8pm, AUD, RBA Gov Lowe Speaks

Wednesday 23/11
All Day, JPY, Bank Holiday
2pm, NZD, Official Cash Rate
Forecast: 4.25%
Previous: 3.50%
2pm, NZD, RBNZ Monetary Policy Statement
2pm, NZD, RBNZ Rate Statement
3pm, NZD, RBNZ Press Conference
9:15pm, EUR, French Flash Services PMI
Forecast: 50.6
Previous: 51.7
9:30pm, EUR, German Flash Manufacturing PMI
Forecast: 45.3
Previous: 45.1
9:30pm, EUR, German Flash Services PMI
Forecast: 46.4
Previous: 46.5
10:30pm, GBP, Flash Manufacturing PMI
Forecast: 45.7
Previous: 46.2
10:30pm, GBP, Flash Services PMI
Forecast: 48
Previous: 48.8 Read more

Sideways moves of late in the Euro (EUR), Australian Dollar (AUD) cross have dominated play with the pair camped out around the 0.6495 (1.5400) area for several days. The recent Hawkish tone from the ECB could limit upside moves for the Aussie this week especially if today’s EU economic sentiment report comes in favourable. Australian Employment data releases Thursday the weekly highlight with predictions the unemployment rate to remain at 3.5%. Chinese metal prices continue to rise after China opens up again post covid lockdowns, this may support the Aussie.

Current Level: 0.6486 (1.5417)
Resistance: 0.6520 (1.5670)
Support: 0.6390 (1.5340)
Last Weeks Range: 0.6391-0.6511 (1.5358-1.5647)

The Australian Dollar (AUD) extended its rise against the English Pound (GBP) Monday reaching 0.5730 (1.7460) early this morning as risk markets improved. The Pound has struggled to gain any momentum since the US CPI print Friday and recent UK recession fears. We have seen selling off the back of BoE Tenreyro’s comments after he said the central bank may need to cut rates next year. Key standouts this week are UK CPI y/y and later Australian employment figures. With inflation at 10.1% and expected to tick higher to 10.7% we may see buying in the GBP.

Current Level: 0.5692 (1.7568)
Resistance: 0.5585 (1.7800)
Support: 0.5620 (1.7900)
Last Weeks Range: 0.5614-0.5694 (1.7560-1.7812)

The Australian Dollar (AUD) rallied late Friday off the back off US CPI easing from 7.9% y/y to 7.7% y/y lower than forecast of 7.9% sending buyer interest back into crosses, the AUD reaching 0.6712 where it sits into Tuesday sessions, a 20 September high. We may be witnessing the formation of a long-term base in the cross and fundamentally a stronger AUD with a bullish tone developing. With key areas opening up in China post lockdown restrictions, industry is booming again and pushing up metal prices such as iron ore and coal, this could underpin further surges and demand in the AUD. Australian jobs data print Thursday, predicted to be solid.

Current Level: 0.6698
Resistance: 0.6900
Support: 0.6500
Last Weeks Range: 0.6383-0.6704

The Euro (EUR) closed the week around the 0.5910 (1.6930) region against the New Zealand Dollar (NZD) after being at 0.5850 (1.7100) levels midweek. Bias in the pair looks to be to the downside with Eurozone growth forecasts and the recently the hawkish ECB, this could limit upside shifts in the kiwi. The economic calendar is thin this week for the pair with just Eurozone Industrial Production and Lagarde speaking Thursday.

Current Level: 0.5900 (1.6949)
Resistance: 0.5990 (1.7130)
Support: 0.5840 (1.6700)
Last Weeks Range: 0.5845-0.5948 (1.6810-1.7107)

The New Zealand Dollar (NZD), British Pound (GBP) has consolidated around the 0.5170 (1.9350) area over the past few days with pressure on the Pound evident. This week’s fiscal plan docket will be announced Thursday by Chancellor Jeremy Hunt which will unveil a slew of tax increases and budget cuts. Making this difficult is a widening gap of consumer cost of living and recession issues as the economy worsens. We think with the recent RBNZ rhetoric and inflation pressures the kiwi may retest the 0.5265 (1.9000) region this week.

Current Level: 0.5178 (1.9312)
Resistance: 0.5235 (1.9500)
Support: 0.5130 (1.9100)
Last Weeks Range: 0.5123-0.5226 (1.9134-1.9517)

Range trading in the New Zealand Dollar (NZD), Australian Dollar (AUD) has the cross bouncing around 0.9090 (1.10) areas this morning. Movement over the following few days could be mild as markets await next week’s RBNZ cash rate release. Aussie jobs data could give us volatility in the cross Thursday if the data prints outside 3.5% and 15,000 predicted, also of note are rising metal prices which could further support the AUD.

Current Level: 0.9094 (1.0986)
Resistance: 0.9140 (1.1170)
Support: 0.8950 (1.0940)
Last Weeks Range: 0.9055-0.9192 (1.0878-0.1.1043)

The US Dollar Index has taken a pounding over the past few weeks falling 6% as the Fed continues with their extremely hawkish monetary policy stance. Equity markets rose overnight pushing up risk products, the kiwi reaching a fresh high of 0.6120 against the US Dollar (USD). Price action into Tuesday suggests the market could still be overreacting to last week’s softer US CPI data, the question is will the kiwi rally hold up, currently trading at a 9-week high. US Retail Sales is expected to be a bumper result printing Thursday. Topside resistance is 0.6160.

Current Level: 0.6094
Resistance: 0.6160
Support: 0.5980
Last Weeks Range: 0.5838-0.6122