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NZDUSD Market Update

8/31/2022 12:01 PM

The New Zealand dollar shows weak growth, recovering from another decline the day before. At the moment, the NZD/USD pair is again testing 0.6150 for a breakout, receiving extremely weak support from the macroeconomic background from New Zealand and China. ANZ Business Confidence rose from -56.7 points to -47.8 points in August, with a forecast of only -55.0 points. ANZ Activity Outlook for the same period corrected from -8.7% to -4.0%, while analysts expected the indicator to worsen to -8.9%. The number of Building Permits issued in New Zealand increased by 5.0% in July after falling by 2.2% a month earlier. The real dynamics turned out to be much better than the average forecasts of analysts.

Governor of the Reserve Bank of New Zealand (RBNZ) Adrian Orr has announced at least two more interest rate hikes. On August 17, regulator officials adjusted the value for the seventh time in a row, bringing it to 3.00% for the first time since September 2015, while noting that the interest rate should be 4.00% in order to stop rapid inflation. Most economists expect New Zealand's monetary tightening cycle to end in early 2023.

In turn, Chinese data reflected a weak increase in NBS Manufacturing PMI in August from 49.0 points to 49.4 points, while the forecast was at 49.2 points. Non-Manufacturing PMI for the same period fell from 53.8 points to 52.6 points, which was only slightly better than expected 52.2 points.

Bollinger Bands in D1 chart demonstrate active decrease. The price range is narrowing, reflecting the emergence of ambiguous dynamics of trading in the short term. MACD is trying to reverse upwards keeping a previous sell signal (located below the signal line). Stochastic demonstrates a similar dynamics, trying to recover from its lows. Current readings of the indicator signal in favor of an uptrend in the ultra-short term.

Resistance levels: 0.6155, 0.6200, 0.6250, 0.6300. | Support levels: 0.6100, 0.6079, 0.6040, 0.6000.

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