RBNZ kept his promise and raised the official cash rate from 2.5% to 2.75%, being the first developed country to make this move since the financial crisis from 2008. The macro data helped as well. Manufacturing Sales increased with 6.3% while the REINZ HPI indicator with 2.1%. The Business NZ Manufacturing Index gave a positive tone to the markets after it was published above 50.0 with a reading of 56.2, which represents expansion of the economy. After the rate hike from Wednesday, NZDUSD hit the local high from May 2013 and closed the week at 0.8527.
Westpac Consumer Sentiment (5:00 GTM)-Sunday. It is the level of diffusion on surveyed consumers and an actual value above the forecast is good for currency. Above 100.0 indicates optimism, below indicates pessimism. It is released quarterly and has a medium impact on the markets. The last five readings were above 100.
Current Account (5:45 GTM)-Tuesday. This indicator represents the difference in value between imported and exported goods, services, income flows and unilateral transfers during the previous quarter. It is directly linked to currency demand-a rising surplus indicates that foreigners are buying more domestic currency to execute transactions in the country. This month it is expected a reading of -1.44B.
GDP q/q (5:45 GTM)-Wednesday. This is a very important indicator which has a high impact on the markets and it the broadest measure of economic activity along with the primary gauge of the economy’s health. Last quarter was published an increase of 1.4% and this week is expected a 1% improvement.
Bank Stress Test Results (4:00 GTM)-Thursday. These are final results of the bank stress test that include which banks passed, which failed and estimates for new capital requirement.
Support: 0.8475, 0.8390
Resistance: 0.8600, 0.8700
After RBNZ raised the interest rate, NZDUSD touched a weekly high of 0.8600 and formed a bearish candlesticks pattern called Shooting Star. If the pattern it is genuine, we need the price to close below the 23.6 Fibonacci retracement level on a daily timeframe. Otherwise, a breakout above the resistance line from 0.8600 level will invalidate the pattern and could send NZDUSD higher towards 0.8700.
Support: 0.8520, 0.8435
Resistance: 0.8560, 0.8600
The hourly chart presents better the aftermath of the RBNZ monetary decision. The price seems to be in a consolidation period for the moment between the support line from 0.8520 and the resistance line from 0.8560. We can talk of a decisive breakout if only the daily resistance/support lines are broken. If this scenario does not happen, we can see a range movement for the NZDUSD.
Bullish or Bearish
This week could be a calmer one for NZDUSD after the volatility created by the RBNZ with its expected decision of raising the official cash rate. So, I think NZDUSD will float next week on a neutral territory, but with a precautionary approach regarding what will happen in Crimea, that could have a big impact on the price action if the tensions intensify.