fbNZDUSD Forecast | Getting ready for the New Zealand inflation data release | IFCM Hong Kong

Technical Analysis NZDUSD : 2021-01-18

Recommendation for NZD/USD:

Sell
Strong SellSellNeutralBuyStrong Buy

Below 0,711

Sell Stop

Above 0,732

Stop Loss

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Senior Analytical Expert
Articles 1688
IndicatorValueSignal
RSI Sell
MACD Buy
MA(200) Neutral
Fractals Neutral
Parabolic SAR Sell
Bollinger Bands Neutral

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe, NZDUSD: D1 is correcting downward from the maximum since April 2018. It broke down the uptrend support line. A number of technical analysis indicators have generated signals for further decline. We do not rule out a bearish movement if NZDUSD falls below its latest low: 0.711. This level can be used as an entry point. We can place a stop loss above the last high fractal and Parabolic signal: 0.732. After opening a pending order, we move the stop loss to the next fractal maximum following the Bollinger and Parabolic signals. Thus, we change the potential profit/loss ratio in our favor. After the transaction, the most risk-averse traders can switch to the four-hour chart and set a stop loss, moving it in the direction of the bias. If the price meets the stop loss (0.711) without activating the order (0.732), it is recommended to delete the order: some internal changes in the market have not been taken into account.

Fundamental Analysis

New Zealand food price index growth exceeded forecasts. Will the NZDUSD quotes move down?

The downward movement signifies the weakening of the New Zealand dollar against the greenback. New Zealand Food Price Index in December was 2.9% in annual terms against 2.6% in November. This may signal a continuation of relatively high inflation and have a negative impact on the kiwi dollar. Recall that in the 3rd quarter of 2020, inflation in New Zealand was 1.4% in annual terms. Q4 inflation will be released on January 21st and it's expected to rise to 2.2%. This is much higher than the 0.25% rate of the Reserve Bank of New Zealand. The drop of the currency pair may also be supported by the strengthening of the greenback amidst the plans of Joe Biden's administration to raise corporate taxes in order to increase government revenues and reduce deficits.

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