NZD Weekly Forecast – Trade as A Risk Currency

With no major data scheduled from New Zealand, traders will likely trade the Kiwi as a high-yielding bet in the next few days.

Planning on trading the comdoll?

Here are the points you need to watch out for:

Lower-tier economic releases

• • Trade balance (Oct 26, 9:45 pm GMT) is expected to show a deficit of 800M NZD in September (from 353M NZD in August) as imports outpace exports
  • ANZ business confidence (Oct 29, 12:00 am GMT) – a report that the Reserve Bank of New Zealand (RBNZ) will likely pay attention to – could improve from -28.5 to -14.5 in October

Overall risk sentiment

• • • NZD has been strengthening across the board lately, which makes it more vulnerable than its other high-yielding peers in case risk sentiment turns sour
    • Pandemic-related updates (rising number of cases, lockdowns, stimulus, vaccine) will continue to affect global risk-taking
    • Top-tier reports from other major economies such as Australia’s quarterly inflation; France, Germany, and U.S.’GDPs, and China’s PMI reports can influence the demand for high-yielding currencies
    • Brexit and stimulus negotiations, in particular, will attract the market players’ focus for the week

Technical snapshot

• • • Stochastic is flagging Kiwi’s “overbought” conditions against the dollar and Aussie
    • NZD remains in somewhat neutral territory against JPY and GBP

• • • EMAs reflect NZD’s short and long-term bullish trends against most of its major counterparts
    • NZD/CHF remains in a bearish trend though it’s seeing short-term demand
    • Watch out for the Kiwi finally trading above the 200 EMA against the euro

• • • Kiwi was most volatile against the European currencies (EUR, GBP, CHF) and the dollar in the last seven days