NZD/USD: Kiwi Starts Week With Losses, NZ Dairy Auction Next

NZD/USD has posted slight losses on Monday, following excellent gains last week. In the North American session, the pair is trading at 0.6860. On the release front, it’s a quiet start to the week. There are no New Zealand releases on the schedule. In the US, Factory Orders is expected to post a decline of 1.5%. On Tuesday, New Zealand releases the GDT Price Index, while the US publishes the ISM Non-Manufacturing PMI.

The US labor market continues to impress, as Friday’s employment numbers were solid. Nonfarm Payrolls came in at 215 thousand, above the estimate of 205 thousand. The unemployment rate edged up to 5.0%. Average Hourly Earnings posted a small gain of 0.3%, ahead of the estimate of 0.2%.  Still, the positive job numbers didn’t help the US dollar gain any ground on Friday.

The US dollar recorded broad losses last week, and the New Zealand currency took full advantage, gaining some 220 points. The greenback sagged after Janet Yellen’s very dovish comments last week at a speech in New York. Yellen warned of risks to the US economy from uncertainty in the global markets and the slowdown in China, and poured cold water on speculation of an April rate hike. With the US economy in good shape, why did Yellen sound ultra-dovish in her comments? Yellen was likely reacting to comments by several Fed members prior to her speech, which were very hawkish in tone, some going as far as calling for a rate hike this month. The contradictory messages coming out of Fed points to a split in the FOMC concerning monetary policy, although Yellen is likely to have the last word. Will the Fed minutes back up Yellen’s dovish outlook, or will we see disagreement amongst Fed policymakers? Analysts will be paying close attention to the Fed minutes on Wednesday, looking for clues as to further rate projections. Traders should be prepared for some volatility after the release of the minutes.

NZD/USD Fundamentals

Monday (April 4)

  • 10:00 US Factory Orders. Estimate -1.5%
  • 10:00 US Labor Market Conditions Index

Upcoming Key Events

Tuesday (April 5)

  • 10:00 US ISM Non-Manufacturing PMI. Estimate 54.1 points
  • Tentative – New Zealand GDT Price Index

*Key releases are highlighted in bold

*All release times are DST

NZD/USD for Monday, April 4, 2016

NZD/USD April 4 at 9:35 DST

Open: 0.6894 Low: 0.6838 High: 0.6904 Close: 0.6858

NZD/USD Technical

S3 S2 S1 R1 R2 R3
0.6449 0.6605 0.6738 0.6897 0.7011 0.7100
  • NZD/USD was flat in the Asian session. The pair posted slight losses in European trade and is steady in the North American session.
  • 0.6897 remains busy and has switched to a resistance role following losses by NZD/USD. It is a weak line
  • 0.6738 is providing support

Further levels in both directions:

  • Below: 0.6738, 0.6605 and 0.6449
  • Above: 0.6897, 0.7011, 0.7100 and 0.7231
  • Current Range: 0.6738 to 0.6897

OANDA’s Open Positions Ratio

The NZD/USD ratio is showing long positions with a majority (56%). This is indicative of trader bias towards NZD/USD reversing directions and moving to higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.