20 Aug 2013
NZD/USD, 1.04% down targeting 0.80 zone
FXstreet.com (Chicago) - NZD/USD remains on corrective channel after steep fall ahead of FOMC minutes and post RBNZ remarks.
Wheeler’s case and well, the Fed
The RBNZ Governor Wheeler speech given earlier today triggered a precipitous price fall leading market participants to place bearish bets and sell offs on the pair. New Zealand relies heavily on foreign investment for real estate development in the country. The lending restrictions introduced today by the bank limiting loans for more than 80% of the purchase price, can be detrimental to the house market growth in the country. Thus, the hawkish outlook mentioned last July 25th when interest rates were kept at 2.5% might turn dovish if inflation is not controlled and house data does not match expectations. In the US, the anxiety is reflected in the ups and downs of price action with stocks yo-yoing back and forth incessantly. The attention remains on the FOMC minutes due tomorrow.
On corrective channel
Price action indicates a steep decline from 0.8070 zone at the opening of today’s session. The price had retraced from 0.8160 zone since yesterday to hit 7-day bottoms at 0.7952. Within the past hour, the kiwi has strengthened 0.01% against the greenback despite being 1.04% down to trade at 0.7983 between supports at 0.7970 (July 12th highs), 0.7952 (July 23rd lows) ahead of 0.7939 (July 17th highs) and resistances at 0.7997 (August 7th highs), 0.8014 (July 31st highs) followed by 0.8042 (August 8th highs). The FXstreet.com trend index reports the pair as slightly bullish on one-hour timeframe analysis.
Wheeler’s case and well, the Fed
The RBNZ Governor Wheeler speech given earlier today triggered a precipitous price fall leading market participants to place bearish bets and sell offs on the pair. New Zealand relies heavily on foreign investment for real estate development in the country. The lending restrictions introduced today by the bank limiting loans for more than 80% of the purchase price, can be detrimental to the house market growth in the country. Thus, the hawkish outlook mentioned last July 25th when interest rates were kept at 2.5% might turn dovish if inflation is not controlled and house data does not match expectations. In the US, the anxiety is reflected in the ups and downs of price action with stocks yo-yoing back and forth incessantly. The attention remains on the FOMC minutes due tomorrow.
On corrective channel
Price action indicates a steep decline from 0.8070 zone at the opening of today’s session. The price had retraced from 0.8160 zone since yesterday to hit 7-day bottoms at 0.7952. Within the past hour, the kiwi has strengthened 0.01% against the greenback despite being 1.04% down to trade at 0.7983 between supports at 0.7970 (July 12th highs), 0.7952 (July 23rd lows) ahead of 0.7939 (July 17th highs) and resistances at 0.7997 (August 7th highs), 0.8014 (July 31st highs) followed by 0.8042 (August 8th highs). The FXstreet.com trend index reports the pair as slightly bullish on one-hour timeframe analysis.