NZD keeps rallying for the fourth day

NZD keeps rallying for the fourth day

2020-08-28 • Updated

NZD/USD has broken the marked downtrend that has been lasting for a month. Recently, it reached levels unseen since December 2019. What are the reasons?

Fundamentals

NZD/USD has been mainly driven by the weakness of the US dollar. Yesterday, US Fed’s Chair Jerome Powell claimed that the Fed will allow inflation and employment to run higher. Therefore, the interest rates will stay at low levels for years to come. Most analysts took it skeptically as they believe these measures may lead to the fragility of the US economy. As a result, the dovish outlook of the Fed’s statement pressed on the greenback. Consequently, riskier assets surged, and the New Zealand dollar was just one of them. That goes against the wish of the Reserve Bank of New Zealand to see the kiwi depreciated, as it makes their goods and services more expensive for other countries. Indeed, the continued bid in the New Zealand dollar will be discouraging for the country.

Economic indicators also added headwinds to the kiwi this week. New Zealand’s retail sales turned out better than predicted this Monday: -14.6% vs. the forecast of -16.3%. Moreover, New Zealand reported a trade surplus, which came out almost matching expectations: 282 million New Zealand dollars, while 285 million were anticipated.

Technical tips

NZD/USD has surged above 0.6720 for the first time since the very beginning of this year. If the pair continues to rise and breaks the resistance of 0.6750, its next bullish target will be at 0.6790 – the high of July 2019. In the opposite scenario, the move below the psychological mark of 0.6600 will drive the price lower to the support of 0.6520. Follow further news and join the flow!

chart1.png

TRADE NOW

Similar

How Will China’s Regulation Affect Oil?
How Will China’s Regulation Affect Oil?

China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.

The Oil Market in the Month of June
The Oil Market in the Month of June

Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.

Oil Market Outlook
Oil Market Outlook

Oil prices rebounded slightly on Friday but are still expected to show losses for the week due to concerns about slowing growth in the US and China. US crude futures rose 2.7% to $70.41 per barrel, while the Brent contract increased by 2.5% to $74.33 per barrel.

Latest news

Gold is Rising Despite Inflation Returns
Gold is Rising Despite Inflation Returns

Gold prices are rising for three consecutive days ahead of the Federal Reserve (Fed) interest rate decision, which is expected to remain unchanged due to declining inflation and a positive economic outlook. Investors are keen on the Fed's interest rate guidance, fearing a hawkish stance that could trigger market risk aversion.

Can the Chinese Economy Recover?
Can the Chinese Economy Recover?

Amid concerns of a Chinese economic slowdown, reports of declining investment often overlook China's efficient investment strategy in emerging sectors for long-term growth. China has taken measures to stabilize foreign and private sector investments, like reducing the reserve requirement ratio to boost investor confidence.

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera