Last week, NZDUSD got through a rollercoaster of emotions as the price set a higher high at 0.8640 and then to have practically a symmetrical downfall and to arrive almost in the same place as it started the week. The macroeconomic data was kind of neutral to bad and had a medium impact on the markets. The Westpac Consumer Sentiment came better than last month with a reading of 121.7. The Current Account was on a deficit of 1.43B, which was slightly better than the forecasted value of 1.44B.
The GDP has been the highlight of the week and disappointed with an increase of just 0.9%, lower than the last quarter value of 1.2%. This publication corroborated with the statements of Janet Yellen, had an immediate effect and this was a descending one for the NZDUSD quotation.
Because the macroeconomic calendar for NZD is very poor this week, we will post the most important indicators from the US that could impact the pair.
Conference Board Consumer Confidence-USD (10:00 GTM)-Tuesday. It is a level of a composite index based on surveyed households. It has a high impact on the markets as financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. It is expected to be published at 78.7.
New Home Sales-USD (10:00 GTM)-Tuesday. This indicator measures the annualized number of new single-family homes that were sold during the previous month. Also, it is a high impact indicator and a leading indicator of economic health. The forecasted value is 447K and any surprise could cause some serious volatility.
Trade Balance-NZD (5:45 GTM)-Wednesday. This is one of the most important macro indicators for the New Zeeland economy. It measures the difference in value between imported and exported goods during the reported month. You should pay attention to this publication as the expected value of 600M is the biggest one since April 2013.
Unemployment Claims-USD (8:30 GTM)-Thursday. This is one of the key indicators for the economic recovery of the US as the labor market is being attentive watched by the FED. It will be interesting to see if the American economy can make another positive surprise as in the last three weeks the jobless claims were below expectations.
Support: 0.8500, 0.8430
Resistance: 0.8565, 0.8640
The daily chart gives us two bearish signals. The first one is a candlesticks pattern called bearish engulfing which announces a peak or a slowdown in its advancement. The second one could be the validation of the first one as we can see that the candlestick from Friday has a small body and a big superior shadow that means the bears are in control. If the descending movement will be validated, the Fibonacci retracement level can show us some support levels. The first one is the 23.6 level at 0.8500 and if is broken could cause some damage and send the price to the support line from 0.8430.
Support: 0.8500, 0.8470
Resistance: 0.8565, 0.8600
On the hourly chart, the price formed an ascending channel that could find some resistance in the 0.8565 area and send the price again on a downwards movement at the key support line from 0.8500. However, if the upwards channel is continued and the price closes above the resistance from 0.8565, the psychological level from 0.8600 could be hit.
Bullish or Bearish
I think the price will be driven mostly by the American publications in the first part of the week as the trade balance indicator from New Zeeland will give the price a certain direction for the remainder of the week. My outlook is bearish and I expect that those two signals from the daily charts to find some validation in the week to come and the NZDUSD lower by the end of the week.