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Kiwi

NZD/ USD Kiwi/ Dollar &10Y Bond Yields I was stopped out on the last pattern i posted on this pair and now entered on another pattern. An alternate Bat pattern. In the white ellipses we have where the HSI Arrow printed in an area of extreme reading then PA came down out of reaction and both oscillators made it at least the 50 line respectively, and then did the HSI "Check back" that Scott Carney uses was done on the second white ellipsis. if Pa is able to close below the .7166X level we could be in a position to head down as the dollar strengthens. Its all Dependent on what the 10Y Yields hold in store. Currently waiting to see how the hour closes. i will ad pictures of the hour look and 10Y Yield synopsis too. 1H Time Frame looking for a close below the neck line for a nice ride down. the daily 10Y Yield For those not familiar with the 10Y Yield it is the true valuation of the US Dollar. The yield is inverse of the bond price as yields go up prices go down to entice investors to invest in the US Economy (Dollar) and as yields go down Prices go up to protect potential buyers from buying a low yield investment. But, where the money is made in the bond world is that when the yields go down the Bond yield is locked. so at the end of the 10 year period the US will pay the holder of the bond the yield printed on the bond regardless of what the current yield is doing. So, lets say Investor A bought the bond at the very low for lets say 100$/ a bond and he bought 100,000$ worth so that means the yield might be locked in at 2%. Lets say the investor A is strapped for cash, so he enters the bond market with his 2% yield bond it looks very enticing because the current rate is 1.5% so, Investor B approaches Investor A with saying "hey ill buy your bond for 101,000 dollars" Investor A realizes he made a profit of 1,000$ and needs the cash now so he agrees to sell it. Now, Investor B holds the 10Y Bond at 2% and if he decides to hold it to fruition then he too will make a 1,000$ profit on his investment. Now, this is why the bond rates are so important to the US dollar because it will let you know where the long term investors are looking at putting their money as good foundation for their portfolios. This is super simplified on how the bond market works and i am by no means a bond trader. So, if there are any bond traders that would like to clarify or correct me please do so i will greatly appreciate it. the technical is that currently the yields have hit a .382 retracement, and in a very strong trend prices usually bounce off the .382 before moving further. so right now we are printing an indecision candle and so we could see more upward movement for the bonds. A lot of people are worried about the bond yields making it to 2.00% so fast and that it might cause inflation and they are partly right. Because the US is going to have all this excess cash flow in the market making the dollar weaker because its readily abundant in such a short time. A 2% yields has not been seen since 2019. So, we shall See
Short
by ARegularGuy
Up or down??depending on witch line it breaks, it will go up or down. have no idea about these country's policies, but i guess that japan needs to sell off the yen to have competitive prices on their electronics and industrial products. on the other side NZ is an economy based on agriculture and tourism, they kind of want a strong dollar. but no idea, since from a tecnical point of view it looks kind of bearish.. even if there is a possible golden cross (to confirm yet) i will wait and evaluate in a few candles if it can be a good trade. how ever there is a 3rd option is that it may rebound in the wedge..who knows some suggestions?? comment please
by warrenbuffettdemicasa
NZD - FUNDAMENTAL DRIVERS1. Developments surrounding the global risk outlook. As a high-beta currency, NZD has remained broadly well supported in times of risk-on and as the overall risk outlook and tolerance of the market has improved over recent months. With coronavirus vaccines programs now underway in many countries, we expect the months ahead to see a further gradual improvement in the overall risk outlook and global economic outlook. 2. The Monetary Policy outlook for the RBNZ. Going into 2021, the monetary policy outlook for the RBNZ were positive after the bank pushed back against the need for negative rates, as well as a string of positive economic data points showed the impact from the pandemic was less severe on the NZ economy than previously anticipated. However, optimism has diminished in recent sessions as new legislation by New Zealand's government to cool its housing market is expected to provide the RBNZ with more time before being forced to normalize policy. Consequently, market expectations for the timing of future rate hikes have been pushed back. 3. The country’s economic and health developments. With the new macroprudential policies put in place by the NZ government, it will be very important to keep close track of the virus situation in NZ as well as the incoming data. This week’s price action saw some strong NZD buying in line with it’s med-term outlook, however given the macroprudential considerations we have kept the med-term bias at weak bullish until we see this week’s incoming CPI data. If incoming data starts to show marked deterioration, that will further push back tapering and rate normalization expectations for the RBNZ and could tilt the fundamental outlook to neutral from weak bullish.
by thunderpips
8
NZD: Current sentiment driversLatest developments: March 17 – GDP for Q4 printed at -1.0% Q/Q and -0.9% Y/Y. Commenting on the contraction in economic activity, Capital Economics stated “The modest solid decline in activity in Q4 reflects the fading of pent up demand and means that in New Zealand a second recession is imminent as GDP is bound to decline in Q1.” February 24 – The RBNZ left its OCR unchanged at a record low of 0.25% and asset purchases at NZ$100 billion as expected. The central bank kept future rate cuts on the table but added that the domestic economy’s resilience implies no significant additional stimulus is currently required. November 3 – For Q4, the Unemployment Rate in New Zealand printed below consensus at 4.9% from 5.3% in Q3. Additionally, Employment Change printed at 0.6% versus market consensus of 0.0%. January 21 – Inflation for Q4 saw CPI Y/Y remain unchanged at 1.4% while CPI Q/Q printed at 0.5% from a prior of 0.7%. Future sentiment shifts: Due to its high beta status, NZD’s performance over recent months has been strongly correlated with the market’s overall risk tone, with the currency weakening substantially as markets sold off and strengthening as the risk tone recovered and turned positive. Recent global data has been encouraging, continuing to support NZD and the overall risk tone; although, the ongoing spread of the virus throughout the world and second waves in many countries still pose significant risks. For a fundamental improvement in NZD’s outlook and bias, there will need to be an easing of concerns surrounding the spread of the coronavirus (which appears likely given the vaccine rollout). However, even then, NZD upside could become an uphill battle with many analysts arguing the currency is approaching overvalued levels. Primary drivers: Reserve Bank of New Zealand – New Zealand’s monetary policy outlook plays a key role in NZD’s fundamental outlook. A hawkish stance from the RBNZ and expectations for policy tightening will support NZD; while a dovish stance and expectations for policy easing will pressure NZD. Risk Tone – Due to its high beta status, NZD is strongly correlated with the overall risk tone; strengthening in risk on environments and weakening in risk off environments. Commodity Markets – NZD is indirectly correlated with commodity markets due to New Zealand’s dependence on China and Australia for trade. As both Australia’s and China’s economies influence and are influenced by the commodities complex, NZD tends to move in accordance with the commodities markets, but also with AUD.
by thunderpips
NZD: Current sentiment driversLatest developments: March 17 – GDP for Q4 printed at -1.0% Q/Q and -0.9% Y/Y. Commenting on the contraction in economic activity, Capital Economics stated “The modest solid decline in activity in Q4 reflects the fading of pent up demand and means that in New Zealand a second recession is imminent as GDP is bound to decline in Q1.” February 24 – The RBNZ left its OCR unchanged at a record low of 0.25% and asset purchases at NZ$100 billion as expected. The central bank kept future rate cuts on the table but added that the domestic economy’s resilience implies no significant additional stimulus is currently required. November 3 – For Q4, the Unemployment Rate in New Zealand printed below consensus at 4.9% from 5.3% in Q3. Additionally, Employment Change printed at 0.6% versus market consensus of 0.0%. January 21 – Inflation for Q4 saw CPI Y/Y remain unchanged at 1.4% while CPI Q/Q printed at 0.5% from a prior of 0.7%. Future sentiment shifts: Due to its high beta status, NZD’s performance over recent months has been strongly correlated with the market’s overall risk tone, with the currency weakening substantially as markets sold off and strengthening as the risk tone recovered and turned positive. Recent global data has been encouraging, continuing to support NZD and the overall risk tone; although, the ongoing spread of the virus throughout the world and second waves in many countries still pose significant risks. For a fundamental improvement in NZD’s outlook and bias, there will need to be an easing of concerns surrounding the spread of the coronavirus (which appears likely given the vaccine rollout). However, even then, NZD upside could become an uphill battle with many analysts arguing the currency is approaching overvalued levels. Primary drivers: Reserve Bank of New Zealand – New Zealand’s monetary policy outlook plays a key role in NZD’s fundamental outlook. A hawkish stance from the RBNZ and expectations for policy tightening will support NZD; while a dovish stance and expectations for policy easing will pressure NZD. Risk Tone – Due to its high beta status, NZD is strongly correlated with the overall risk tone; strengthening in risk on environments and weakening in risk off environments. Commodity Markets – NZD is indirectly correlated with commodity markets due to New Zealand’s dependence on China and Australia for trade. As both Australia’s and China’s economies influence and are influenced by the commodities complex, NZD tends to move in accordance with the commodities markets, but also with AUD.
by thunderpips
6
NZD - FUNDAMENTAL DRIVERS1. Developments surrounding the global risk outlook. As a high-beta currency, NZD has remained broadly well supported in times of risk-on and as the overall risk outlook and tolerance of the market has improved over recent months. With coronavirus vaccines programs now underway in many countries, we expect the months ahead to see a further gradual improvement in the overall risk outlook and global economic outlook. 2. The Monetary Policy outlook for the RBNZ Going into 2021, the monetary policy outlook for the RBNZ were positive after the bank pushed back against the need for negative rates, as well as a string of positive economic data points showed the impact from the pandemic was less severe on the NZ economy than previously anticipated. However, optimism has diminished in recent sessions as new legislation by New Zealand's government to cool its housing market is expected to provide the RBNZ with more time before being forced to normalize policy. Consequently, market expectations for the timing of future rate hikes have been pushed back. 3. The country’s economic and health developments With the new macroprudential policies put in place by the NZ government, it will be very important to keep close track of the virus situation in NZ as well as the incoming data. If incoming data starts to show marked deterioration, that will further push back tapering and rate normalization expectations for the RBNZ and could tilt the fundamental outlook to neutral from weak bullish.
by thunderpips
4
NZD: Current sentiment driversLatest developments: March 17 – GDP for Q4 printed at -1.0% Q/Q and -0.9% Y/Y. Commenting on the contraction in economic activity, Capital Economics stated “The modest solid decline in activity in Q4 reflects the fading of pent up demand and means that in New Zealand a second recession is imminent as GDP is bound to decline in Q1.” February 24 – The RBNZ left its OCR unchanged at a record low of 0.25% and asset purchases at NZ$100 billion as expected. The central bank kept future rate cuts on the table but added that the domestic economy’s resilience implies no significant additional stimulus is currently required. November 3 – For Q4, the Unemployment Rate in New Zealand printed below consensus at 4.9% from 5.3% in Q3. Additionally, Employment Change printed at 0.6% versus market consensus of 0.0%. January 21 – Inflation for Q4 saw CPI Y/Y remain unchanged at 1.4% while CPI Q/Q printed at 0.5% from a prior of 0.7% Future sentiment shifts: Due to its high beta status, NZD’s performance over recent months has been strongly correlated with the market’s overall risk tone, with the currency weakening substantially as markets sold off and strengthening as the risk tone recovered and turned positive. Recent global data has been encouraging, continuing to support NZD and the overall risk tone; although, the ongoing spread of the virus throughout the world and second waves in many countries still pose significant risks. For a fundamental improvement in NZD’s outlook and bias, there will need to be an easing of concerns surrounding the spread of the coronavirus (which appears likely given the vaccine rollout). However, even then, NZD upside could become an uphill battle with many analysts arguing the currency is approaching overvalued levels. Primary drivers: Reserve Bank of New Zealand – New Zealand’s monetary policy outlook plays a key role in NZD’s fundamental outlook. A hawkish stance from the RBNZ and expectations for policy tightening will support NZD; while a dovish stance and expectations for policy easing will pressure NZD. Risk Tone – Due to its high beta status, NZD is strongly correlated with the overall risk tone; strengthening in risk on environments and weakening in risk off environments. Commodity Markets – NZD is indirectly correlated with commodity markets due to New Zealand’s dependence on China and Australia for trade. As both Australia’s and China’s economies influence and are influenced by the commodities complex, NZD tends to move in accordance with the commodities markets, but also with AUD.
by thunderpips
2
NZD - CENTRAL BANK ANALYSISObjective: The Reserve Bank of New Zealand Act 1989 identifies the RBNZ's economic objectiveas achieving and maintaining stability in the general level of prices over the medium term. In April 2019, the Act was amended to also include supporting maximum sustainable employment. In 1990, the RBNZ became the first central bank to formally adopt inflation targeting which as of 2012 is 1-3%. As of Q4, inflation in New Zealand stands at 1.4%, unchanged from Q3. The Unemployment Rate for Q4 stands at 4.9%, compared to 5.3% for Q3. Situation: At their February meeting, the RBNZ left its Official Cash Rate unchanged at 0.25%, and its large scale asset purchase (LSAP) programme at NZ$100 billion until June 2022. The central bank kept future rate cuts on the table, noting that the outlook is uncertain with several factors currently supporting economic activity likely to be temporary. However, the RBNZ also upgraded its forecasts for inflation and trade weighted index for NZD and concluded that resilience in the domestic economy implies no significant additional stimulus is currently required.
by thunderpips
2
NZD - WEAK BULLISHThe primary drivers for NZD are its high-beta status and the RBNZ's monetary policy outlook. As a high-beta currency, NZD has remained broadly well supported in times of risk-on and as the overall risk outlook and tolerance of the market has improved over recent months. With coronavirus vaccines programs now underway in many countries, we expect the months ahead to see a further gradual improvement in the overall risk outlook and global economic outlook. However, regarding NZD's monetary policy outlook, optimism has diminished in recent sessions as new legislation by New Zealand's government to cool its housing market is expected to provide the RBNZ with more time before being forced to normalize policy. Consequently, market expectations for the timing of future rate hikes have been pushed back.
by thunderpips
2
NZD: Current sentiment driversLatest developments: March 17 – GDP for Q4 printed at -1.0% Q/Q and -0.9% Y/Y. Commenting on the contraction in economic activity, Capital Economics stated “The modest solid decline in activity in Q4 reflects the fading of pent up demand and means that in New Zealand a second recession is imminent as GDP is bound to decline in Q1.” February 24 – The RBNZ left its OCR unchanged at a record low of 0.25% and asset purchases at NZ$100 billion as expected. The central bank kept future rate cuts on the table but added that the domestic economy’s resilience implies no significant additional stimulus is currently required. November 3 – For Q4, the Unemployment Rate in New Zealand printed below consensus at 4.9% from 5.3% in Q3. Additionally, Employment Change printed at 0.6% versus market consensus of 0.0%. January 21 – Inflation for Q4 saw CPI Y/Y remain unchanged at 1.4% while CPI Q/Q printed at 0.5% from a prior of 0.7% Future sentiment shifts: Due to its high beta status, NZD’s performance over recent months has been strongly correlated with the market’s overall risk tone, with the currency weakening substantially as markets sold off and strengthening as the risk tone recovered and turned positive. Recent global data has been encouraging, continuing to support NZD and the overall risk tone; although, the ongoing spread of the virus throughout the world and second waves in many countries still pose significant risks. For a fundamental improvement in NZD’s outlook and bias, there will need to be an easing of concerns surrounding the spread of the coronavirus (which appears likely given the vaccine rollout). However, even then, NZD upside could become an uphill battle with many analysts arguing the currency is approaching overvalued levels. Primary drivers: Reserve Bank of New Zealand – New Zealand’s monetary policy outlook plays a key role in NZD’s fundamental outlook. A hawkish stance from the RBNZ and expectations for policy tightening will support NZD; while a dovish stance and expectations for policy easing will pressure NZD. Risk Tone – Due to its high beta status, NZD is strongly correlated with the overall risk tone; strengthening in risk on environments and weakening in risk off environments. Commodity Markets – NZD is indirectly correlated with commodity markets due to New Zealand’s dependence on China and Australia for trade. As both Australia’s and China’s economies influence and are influenced by the commodities complex, NZD tends to move in accordance with the commodities markets, but also with AUD.
by thunderpips
NZD - WEAK BULLISHThe primary drivers for NZD are its high-beta status and the RBNZ's monetary policy outlook. As a high-beta currency, NZD has remained broadly well supported in times of risk-on and as the overall risk outlook and tolerance of the market has improved over recent months. With coronavirus vaccines programs now underway in many countries, we expect the months ahead to see a further gradual improvement in the overall risk outlook and global economic outlook. However, regarding NZD's monetary policy outlook, optimism has diminished in recent sessions as new legislation by New Zealand's government to cool its housing market is expected to provide the RBNZ with more time before being forced to normalize policy. Consequently, market expectations for the timing of future rate hikes have been pushed back.
by thunderpips
5