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NZD dips on trade index data

Article by ForexTime

In recent days the NZD has managed to find itself in a bit of resurgence up the charts against the USD as positioned were unwound and people were looking for some positives out of the NZ economy. The bulls today have suffered a minor set-back as they look to climb they charts with the NZ trade index coming in much weaker than anticipated at -1.8% q/q (0.0% exp). This drop in the trade index has been lead by lower commodity prices at the farm gate and continues the trend in the last five quarters of a drop. The flow on effects to the economy at this stage are estimated to be substantial especially with the fixed income traders who have instead turned their attention back at the USD as it looks likely the NZ economy will have to sustain low interest rates for some time.

The NZDUSD managed to fight back today but stalled briefly at the 100 day moving average, however it managed to quickly jump higher before the bears took a big swipe and have since pushed it back down aggressively on the chart. It has so far stopped just short of the 0.7061 support level as the market is once again frets with the idea of looking to push lower and take on the 70 cent psychological barrier. The hard level of support and floor that seems to be appearing is likely to be found flat on 0.6994, with multiple tests coming at this level. At present the 200 day moving average is also acting as dynamic resistance and I would expect it to continue to hold out against movements higher in the marketplace.

Lastly oil has certainly made its mark today as OPEC stunned the vast majority of investors by actually coming to some sort of agreement. In the process though it did kick out Indonesia and then redistribute its supply amongst the members, which in turn has lead to this large rush, but not as big as one might expect. The next thing many are looking for is if the non OPEC countries like Russia look to actually play ball and cut back production as well in an effort to bolster prices further. Certainly there is still a glut of oil in the world, and something does need to happen for it disappear.

Chart wise WTI oil has so far been looking strong with the bulls and rushed up to the $50 dollar a barrel mark before retreating slightly. Resistance for going higher is likely to be found at 49.80 and I would expect the market to struggle past this point unless the non OPEC countries come into line with the agreement. Any falls for oil are likely to be found at 47.88 which is acting as a hard level of support in the marketplace and with the 50 day moving average hovering around this area it will be tough for traders to push past with the current situation.

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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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