Key Highlights
- The New Zealand Dollar likely made a short-term top near 0.7430 against the US Dollar.
- The NZD/USD is attempting a close below an important support at 0.7330 on the 4-hours chart.
- Fed kept the interest rates unchanged, but the central bank’s hawkish tone caught the market attention.
- New Zealand Gross Domestic Product in Q2 2017 increased 0.8%, similar to the forecast.
NZDUSD Technical Analysis
The New Zealand Dollar made good ground this past week and traded above 0.7400 against the US Dollar. However, the NZD/USD pair struggled to sustain momentum and currently trading below 0.7360.
Looking at the 4-hours chart of NZD/USD, it seems like the pair is forming a short-term top near 0.7433. The pair started a downtrend and moved below the 38.2% Fib retracement level of the last wave from the 0.7182 low to 0.7433 high.
During the recent slide, the pair broke a major support area near 0.7335. At the outset, it is attempting a close below an important support at 0.7330 on the same chart.
If there is a close below 0.7330 followed by a break of the 50% Fib retracement level of the last wave from the 0.7182 low to 0.7433 high, there can be more declines towards 0.7280-0.7250 in the near term.
New Zealand Gross Domestic Product
Today in New Zealand, the Gross Domestic Product for Q2 2017 was released by the Statistics New Zealand. The forecast was slated for a rise of 0.8% in the GDP compared with the previous quarter.
However, the actual result was in line with the forecast as there was an increase of 0.8% in the GDP in Q2 2017, but it was more than the last revised 0.6%. Looking at the yearly change, there was an increase of 2.5%, similar to the forecast and the last +2.5%.
Commenting on the same, the national accounts senior manager, Gary Dunnet, stated:
Strong export and domestic demand underpinned growth this quarter. Demand for exports has resulted in strong production growth in manufacturing and service industries. Eleven of 16 industries increased in the latest quarter, with retail trade and accommodation having the biggest rise.
Overall, the result was positive, but the market sentiment is bearish for NZD/USD, which could take it towards the 0.7280 level in the near term.
