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The New Zealand dollar ended the previous week on a mixed note. Can this week’s catalysts inspire one-directional moves?

Quarterly CPI report (Jan 23, 9:45 pm GMT)

  • Prices went up by 0.7% in Q3 2019, higher than the 0.6% increase seen in Q2 and what markets had expected
  • Inflation is at 1.5% on an annualized basis. It’s lower than Q2’s 1.7% growth but higher than estimates of a 1.4% gain. Turned out, lower transport costs dragged on prices
  • NZD spiked higher after the release, but soon traded lower after the RBNZ hinted of lower interest rates
  • Analysts see quarterly prices at 0.4%, while annualized readings could improve to 1.8%

Market risk sentiment

  • With no major updates expected from the U.S.-China trade negotiations, traders could focus on top-tier reports like U.S., Euro Zone, and U.K.’s PMI releases
  • Central bank events like the BOJ, BOC, PBoC, and ECB’s policy decisions can also affect demand for higher-yielding bets
  • Oil prices can also take center stage as markets look to political updates in Libya and Iraq for price direction

Technical snapshot

  • AUD/NZD, EUR/NZD, and NZD/CHF are all trading below their short AND long-term EMAs on the daily
  • NZD/JPY is trading above its short and long-term EMAs on the daily time frame
  • NZD/CAD and NZD/USD are trading above their long-term EMAs but below their short-term EMAs. Watch out for retracement or reversal opportunities

  • NZD has been most volatile against JPY, GBP, CHF, and USD in the last 30 days

Missed last week’s price action? Read NZD’s price recap for January 13 – 17!