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The GDP report is up this week!

Can the release inspire more volatility for the Kiwi?

Here are market themes you need to watch out for if you’re trading the comdoll!

Quarterly GDP (Sept 16, 10:45 pm GMT)

  • The economy contracted by 1.6% in Q1 2020 – the first drop since December 2010 and the fastest decline in 29 years – as the first impact of the pandemic hits economic activity
  • NZD dropped during the Asian session but recovered most of its losses in London session trading
  • Analysts see the economy contracting by 13.1% in Q2 2020
  • The annualized rate could contract by as much as 13.5% after a 0.2% dip in Q1 2020
  • A worse-than-expected release could remind traders that the Reserve Bank of New Zealand (RBNZ) is not ruling out a negative interest rate

Broad risk sentiment

  • All eyes will be on the FOMC event (Sept 16, 6:00 am GMT), which will reveal the Fed’s dot plot projections and maybe hint at Powell’s plans to target inflation
  • A data dump from China – one of New Zealand’s biggest trading partners – on Sept 15, 2:00 am GMT is expected to show improved growth rates for the fixed asset investment, industrial production, retail sales, and unemployment rate
  • While no changes are expected, policy announcements from the Bank of England (BOE) and the Bank of Japan (BOJ) could inspire volatility for high-yielding currencies like the Kiwi
  • Pandemic-related updates (lockdown prospects, vaccine progress, stimulus talks) will continue to influence NZD’s price action
  • Uncertainty over a no-deal Brexit could also spill over to comdoll trading this week

Technical snapshot

  • Bollinger Bands hint at NZD being “overbought” against the pound on the daily time frame
NZD Forex Pairs Bollinger Bands from MarketMilk
NZD Forex Pairs Bollinger Bands from MarketMilk
  • Daily SMAs hint at potential retracement or reversal opportunities on AUD/NZD, EUR/NZD, and NZD/CHF
  • The Kiwi remains bullish against GBP, USD, JPY, and CAD on the daily time frame
NZD Forex Pairs SMAs from MarketMilk
NZD Forex Pairs SMAs from MarketMilk
  • Kiwi was most volatile against the safe havens and the pound in the last seven days
NZD Forex Pairs Volatility from MarketMilk
NZD Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read NZD’s price recap for September 7 – 11!