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NZD-USD

NZDUSD Potential for Bullish Continuation| 25th November 2022The price is moving above the ichimoku cloud and ascending channel on the H4 chart, indicating a bullish market. Looking for a retracement buy entry at 0.62044, where the previous swing high was. Stop loss will be set at 0.60872, where the previous swing low and 23.6% Fibonacci line is is. Take profit will be at 0.63525, where the 88% Fibonacci line is located. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by Rockqet
2
NZDUSD Potential for Bullish Continuation| 24th November 2022The price is moving above the ichimoku cloud and ascending channel on the H4 chart, indicating a bullish market. Looking for a retracement buy entry at 0.62044, where the previous swing high was. Stop loss will be set at 0.60872, where the previous swing low is. Take profit will be at 0.63525, where the 88% Fibonacci line is located. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by Rockqet
2
NZDUSD Potential For Bearish ContinuationThe price is moving above the ichimoku cloud and ascending channel on the H4 chart, indicating a bullish market. Looking for a retracement buy entry at 0.62044, where the previous swing high was. Stop loss will be set at 0.60872, where the previous swing low is. Take profit will be at 0.63525, where the 61.8% Fibonacci line is located. Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
Long
by VantageMarkets
NZDUSD Potential for Bullish Continuation| 23rd November 2022The price is moving above the ichimoku cloud and ascending channel on the H4 chart, indicating a bullish market. Looking for an immediate buy entry at 0.61632, where the previous swing high is. Stop loss will be set at 0.59998, where the 61.8% Fibonacci line is. Take profit will be set at 0.63525, where the 88% Fibonacci line is. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by Rockqet
1
InvestMate|NZD/USD Long-awaited correction🥝🥝NZD/USD Long-awaited correction. 🥝That's what I wrote in my last post about the coming falls: 🥝That's how I would like to update/extend my downward perspective this time: 🥝The impressive gains that the New Zealand Dollar has made over the last few months is quite astounding. 🥝The NZD/USD pair was helped fact that there was a sharp wave of declines in the US Dollar as the New Zealand Dollar strengthened. 🥝Which resulted in a straight upward wave with virtually no major corrections. 🥝 Therefore, in my opinion, it was time to catch up and make a downward correction. 🥝Because looking at the chart, the price has been struggling to break through to new highs for a good two weeks. 🥝This is how we get to the support zone which, in my opinion, could hold precious if there will be a downward correction. 🥝Zone was determined by a cluster of two fibo levels. The first is the level of 0.236 of the entire downward wave that started on 25 February 2021. The second level is 0.382 of the entire current upward wave from the peak. It can also be seen that during the current upward wave from the peak, the price has repeatedly found support/resistance at that zone. 🥝The resistance zone will remain around the current peaks between the fibo level of the current downward wave 0.618 and the new highs. 🥝The scenario I am playing out is the final execution of a downward correction with a range reaching the support zone marked on the chart, taking into account smaller corrections along the way. 🥝*Please do not suggest the path I have drawn with the lines this is only a hypothetical scenario. 🚀If you appreciate my work and effort put into this post I encourage you to leave a like and give a follow on my profile.🚀
Short
by InvestMate
2
NZDUSD Potential for Bearish Momentum | 22nd November 2022The price is moving above the ichimoku cloud and ascending channel on the H4 chart, indicating a bullish bias. However, I am looking to possibly play the pullback. Price has tapped into my sell entry at 0.61565, with take profit at 0.59998, where the 61.8% Fibonacci projection line is located. Also a retail double top pattern has formed. Stop loss will be at 0.62504, where the previous high was located. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by Rockqet
NZDUSD Potential for Bearish Momentum | 21st November 2022The price is moving above the ichimoku cloud and ascending channel on the H4 chart, indicating a bullish bias. However, I am looking to possibly play the pullback. Price has tapped into my sell entry at 0.61565, with take profit at 0.59998, where the 61.8% Fibonacci projection line is located. Stop loss will be at 0.62504, where the previous high was located. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by Rockqet
1
NZDUSD range bound, with RBNZ on the horizonOn Friday, the NZDUSD traded with significant volatility as the price surged strongly to the 0.62 resistance level but failed to break above, ending the trading week at the 0.6150 price level. Early in the trading session today, the NZDUSD is trading lower with the potential to reach the 0.61 support level. Look for the NZDUSD to break the 0.6120 interim price level to signal further downside potential toward the 0.6070 key support level. Watch out for the RBNZ interest rate decision on the horizon, with a 75bps rate hike expected, this could bring significant volatility to the NZDUSD.
Short
by JinDao_Tai
1
InvestMate|NZD/USD Kiwi ready to fall🥝🥝NZD/USD Kiwi ready to fall 🥝That's as I wrote in last posts. The dollar is ready to score an upward correction in the current downtrend. 🥝It's perfect because the exact same situation will happen on the New Zealand dollar but in the opposite direction 🥝This creates an ideal opportunity to make some profit on NZD/USD declines 🥝Looking at the fact that we have passed a double top and the strength on the upside in recent weeks has dropped significantly I decided to establish a resistance zone at the tops. 🥝I determined the support zone based on the fibo level of 0.5 of the whole upward wave. In which the price has repeatedly found support and also resistance. 🥝The scenario I'm playing out is the start of a decline with the aim of making a larger downward correction, taking into account small corrections along the way 🥝*Please do not suggest the path I have drawn with the lines this is only a hypothetical scenario for further increases. 🚀If you appreciate my work and effort put into this post I encourage you to leave a like and give a follow on my profile.🚀
Short
by InvestMate
14
NZDUSD Potential for Bearish Momentum | 18th November 2022The price is moving above the ichimoku cloud and ascending channel on the H4 chart, indicating a bullish bias. However, I am looking to possibly play the pullback. Price has tapped into my sell entry at 0.61565, with take profit at 0.59998, where the 61.8% Fibonacci projection line is located. Stop loss will be at 0.62504, where the previous high was located. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by Rockqet
3
NZDUSD Potential for Bearish Momentum | 17th November 2022The price is moving above the ichimoku cloud and ascending channel on the H4 chart, indicating a bullish bias. However, I am looking to possibly play the pullback. Price has tapped into my sell entry at 0.61565, with take profit at 0.59998, where the 61.8% Fibonacci projection line is located. Stop loss will be at 0.62504, where the previous high was located. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by Rockqet
1
NZDUSD Potential for Bearish Momentum | 16th November 2022The price is moving above the ichimoku cloud and ascending channel on the H4 chart, indicating a bullish bias. However, I am looking to possibly play the pullback with my sell entry at 0.61565, with take profit at 0.59998, where the 61.8% Fibonacci projection line is located. Stop loss will be at 0.62504, where the previous high was located. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by Rockqet
1
NZDUSD Potential for Bullish Continuation | 15th November 2022The price is moving above the ichimoku cloud and ascending channel on the H4 chart. I'm looking for a pullback buy entry at 0.59998, which corresponds to the 61.8% Fibonacci projection line. The stop loss will be set at 0.58599, just below the 61.8% Fibonacci line. The take profit level will be 0.61565, which is the previous swing high. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by Rockqet
3
NZDUSD M30: Bearish outlook seen, further downside below 0.61200On the M30 time frame, prices are showing bearish order flow and facing bearish pressure from the resistance at 0.61200, in line with the graphical resistance zone. We could see a further downside below this level and a pullback presents an opportunity to play the drop, with further downside seen to the support zone at 0.60300, which is the H4 demand zone. This 0.60300 support zone lines up with the graphical support and 38.2% Fibonacci retracement. Stochastic is testing resistance at 99.57 as well where we could see a reversal below this level, supporting the bearish bias.
Short
by T3-Consultancy
Where could the NZDUSD go?The NZDUSD climbed steadily to the upside toward the end of the trading week, with the price reaching a high of 0.6130. Currently, the price has retraced and is consolidating below the 0.61 price level. If the DXY continues to weaken, the NZDUSD could continue to climb higher toward the next key resistance level of 0.6250. Alternatively, if the DXY stages a sustained recovery in strength, the NZDUSD could reverse back down toward the 0.5858 support level. This is also following recent news release that the RBNZ could be looking to hike rates by only 50bps instead of 75bps at the upcoming meeting. However, a trend-following scenario would be more likely for now.
Long
by JinDao_Tai
1
NZDUSD Potential for Bullish Continuation | 14th November 2022On the H4 chart, as the price is moving above ichimoku cloud and ascending channel. I am looking for a pullback buy entry at 0.59998, where the 61.8% Fibonacci projection line is located. Stop loss will be at 0.58599, slightly below where the 61.8% Fibonacci line is. Take profit will be at 0.61565, where the previous swing high is. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by Rockqet
2
NZDUSD Potential for Bullish Continuation | 11th November 2022On the H4 chart, as the price is moving above ichimoku cloud and ascending channel, the price may rise to the buy entry at 0.60395, which is in line with the previous swing high and 61.8% fibonacci projection. If the 1st resistance is broken, the take profit could be at 0.61546, where the previous swing high is. Alternatively, the price may drop to the stop loss at 0.59276, which is in line with the 38.2% fibonacci retracement. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by Rockqet
1
NZD USD - FUNDAMENTAL DRIVERSNZD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Over the past 12 months the NZD has been a tricky currency to pin down. Fundamentals that should have provided support haven’t, and the country’s lower terms of trade has made it the biggest loser among the high betas in the cyclical environment. However, over the last few weeks the NZD’s price action has been a lot more promising by responding positively to hawkish RBNZ comments, and bullish to solid CPI and Jobs data. Which means trading NZD has been looking more attractive again. For the week ahead, overall risk sensitivity needs to be kept in mind for the NZD, as well as any further developments regarding the recent rumours and speculation of a potential China reopening. POSSIBLE BULLISH SURPRISES Positive Covid developments in China (easing restrictions, more fiscal or monetary stimulus, or letting go of the covidzero policy) could trigger bullish reactions in the NZD. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bullish reactions in the NZD. Catalyst that triggers recovery in key export commodities (China stimulus, lifting covid restrictions, new infrastructure projects in China) should be supportive for the NZD. Data showing China’s growth outlook is improving or surprise announcement at the CCP congress that Covid-zero will end could provide upside for the NZD. POSSIBLE BEARISH SURPRISES Negative Covid developments in China (increasing restrictions or adding additional ones) could trigger bearish reactions in the NZD. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bearish reactions in the NZD. Catalyst that triggers further weakness in key export commodities (additional China restrictions, demand destruction) could be negative for the NZD. Data showing China’s growth outlook is deteriorating or strong affirmation that the covid-zero policy is here to stay could add additional pressure on the NZD. BIGGER PICTURE The bigger picture outlook for the NZD is neutral for now, but that is largely dependent on what happens to China as the New Zealand economy is also very dependent on trade with China and Australia, and also dependent on whether the RNBZ sticks to their hawkish tone or pivots more dovish in the meetings ahead. The currency has been moving more in line with its fundamentals over the past few weeks, which is something that we have not seen for the NZD in the past 12 months. This means opportunities for the NZD is starting to look attractive again. For the week ahead the main highlight will be the US CPI report which can have a big impact across major asset classes. Apart from that, overall risk sentiment and any additional developments on China’s side with regards to potential reopening will be important to watch. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing another acceleration in the SEP CPI data, the Fed is under pressure to continue hiking rates and ramping up QT. At the NOV FOMC presser, Fed Chair Powell shattered any big hopes of a pivot and warned that their SEP expectations for the terminal rate will have to be revised higher. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction for both the USD and US10Y (good data expected to be supportive for the USD and US yields while bad data is expected to pressure the USD and US yields). The past week was a choppy one for the USD, with upside seen after the more hawkish Fed presser, but a unexpected and punchy move lower after Friday’s mixed NFP jobs report. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced for the Fed and USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a >5.5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays aggressively hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. The week ahead will give us the most recent US CPI data which will be the biggest focus for markets, and we also have UoM Consumer Sentiment to watch. The price action in the USD following Friday’s NFP was interesting, but not something to use with any real conviction to trade into the week ahead. Waiting for CPI and UoM Consumer Sentiment seems like the safest way to approach the USD in the week ahead.
by thunderpips
1
NZD USD - FUNDAMENTAL DRIVERSNZD FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE Over the past 12 months the NZD has been a tricky currency to pin down. Fundamentals that should have provided support haven’t, and the country’s lower terms of trade has made it the biggest loser among the high betas in the cyclical environment. However, over the last few weeks the NZD’s price action has been a lot more promising by responding positively to hawkish RBNZ comments, and bullish to solid CPI and Jobs data. Which means trading NZD has been looking more attractive again. For the week ahead, overall risk sensitivity needs to be kept in mind for the NZD, as well as any further developments regarding the recent rumours and speculation of a potential China reopening. POSSIBLE BULLISH SURPRISES Positive Covid developments in China (easing restrictions, more fiscal or monetary stimulus, or letting go of the covidzero policy) could trigger bullish reactions in the NZD. As a risk sensitive currency, and catalyst that causes big bouts of risk on sentiment could trigger bullish reactions in the NZD. Catalyst that triggers recovery in key export commodities (China stimulus, lifting covid restrictions, new infrastructure projects in China) should be supportive for the NZD. Data showing China’s growth outlook is improving or surprise announcement at the CCP congress that Covid-zero will end could provide upside for the NZD. POSSIBLE BEARISH SURPRISES Negative Covid developments in China (increasing restrictions or adding additional ones) could trigger bearish reactions in the NZD. As a risk sensitive currency, and catalyst that causes big bouts of risk off sentiment could trigger bearish reactions in the NZD. Catalyst that triggers further weakness in key export commodities (additional China restrictions, demand destruction) could be negative for the NZD. Data showing China’s growth outlook is deteriorating or strong affirmation that the covid-zero policy is here to stay could add additional pressure on the NZD. BIGGER PICTURE The bigger picture outlook for the NZD is neutral for now, but that is largely dependent on what happens to China as the New Zealand economy is also very dependent on trade with China and Australia, and also dependent on whether the RNBZ sticks to their hawkish tone or pivots more dovish in the meetings ahead. The currency has been moving more in line with its fundamentals over the past few weeks, which is something that we have not seen for the NZD in the past 12 months. This means opportunities for the NZD is starting to look attractive again. For the week ahead the main highlight will be the US CPI report which can have a big impact across major asset classes. Apart from that, overall risk sentiment and any additional developments on China’s side with regards to potential reopening will be important to watch. USD FUNDAMENTAL OUTLOOK: BULLISH BASELINE With headline CPI above 8% and Core CPI seeing another acceleration in the SEP CPI data, the Fed is under pressure to continue hiking rates and ramping up QT. At the NOV FOMC presser, Fed Chair Powell shattered any big hopes of a pivot and warned that their SEP expectations for the terminal rate will have to be revised higher. The Fed is on a data-dependent (meeting-by-meeting) policy stance, meaning incoming growth, inflation and jobs data remains a key driver for short-term USD volatility where we expect a cyclical reaction for both the USD and US10Y (good data expected to be supportive for the USD and US yields while bad data is expected to pressure the USD and US yields). The past week was a choppy one for the USD, with upside seen after the more hawkish Fed presser, but a unexpected and punchy move lower after Friday’s mixed NFP jobs report. POSSIBLE BULLISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely good growth, inflation or jobs data is expected to trigger short-term bullish reactions in the USD. If the cyclical outlook continues to weaken, the USD’s safe haven status still matters. Any incoming catalysts that increase deep recession fears and triggers strong moves lower in risk assets & bonds can trigger safe haven flows into the USD. With a lot priced for the Fed and USD, the bar is high for hawkish Fed surprises, but any aggressive Fed speak talking up a >5.5% terminal rate can trigger further USD upside. POSSIBLE BEARISH SURPRISES With the Fed signalling a data dependent policy stance, we expect a cyclical reaction from the USD with incoming US data. Thus, extremely bad growth, inflation or jobs data is expected to trigger short-term bearish reactions in the USD. If the cyclical outlook starts to improve, the USD’s safe haven status still matters. Any incoming catalysts that decrease deep recession fears and triggers strong moves higher in risk assets & bonds can trigger safe haven outflows out of the USD. With a lot priced in for the Fed and the USD, it won’t take much to disappoint on the dovish side. Any big concerns about growth from Fed speakers could trigger outflows. BIGGER PICTURE The fundamental outlook for the USD remains bullish as long as the Fed stays aggressively hawkish and cyclical concerns put pressure on risk sentiment. The data dependent stance from the Fed means that short-term data surprises can pull the USD either way and would be our preferred way of trading the Dollar right now. The week ahead will give us the most recent US CPI data which will be the biggest focus for markets, and we also have UoM Consumer Sentiment to watch. The price action in the USD following Friday’s NFP was interesting, but not something to use with any real conviction to trade into the week ahead. Waiting for CPI and UoM Consumer Sentiment seems like the safest way to approach the USD in the week ahead.
by thunderpips
6