USD Gingerly Ahead Of Federal Budget Balance Report

Ahead of the RBNZ’s financial stability report on May 10, investors had priced in the possibility New Zealand’s central bank would release new measures on lending to the property market due to recent excesses in Auckland’s housing market. However, the central bank did not make any changes to the current lending rules yesterday.

It is likely that a lower interest rate was not enough to prevent the slowdown led by risks from low dairy prices and surging houses prices in the last six months. Hence, Governor Wheeler commented that restrictions were currently analyzed and calculated and the time frame to issue new measures has not been defined yet.

Tomorrow, retail sales (q/q) are scheduled to be released by New Zealand Statistics, with a forecast for a 1.0% increase for the first quarter in 2016. In the same period last year, the retail sales witnessed a jump of 2.7%.

In the US, wholesale inventories for March inched up 0.1% from the previous month. Economists had forecast a rise of 0.2% in wholesalers’ stockpiles. Data from the Commerce Department also showed that revenue in this sector marked the fastest pace of growth since last April, climbing 0.7% in March.

US Federal budget balance is scheduled to be released tomorrow. The reading is expected to register a surplus of $116.2 billion in April, compared with a deficit of $108.0 billion in the month before. The dollar index DXY is moving gingerly, standing at 94.15, 12 points lower from the last close.

nzdusd d1

Fig. NZDUSD D1 Technical Chart

Yesterday, NZDUSD made a sharp mover lower to hit the level of 0.67139 – the lowest since March 29, due to bearish sentiment engulfing the kiwi. The pair plunged into the oversold territory and may recover from this zone as the %K line (blue line) has already crossed over the %D line (red line). The price is anticipated to maintain the up trend. Level 50.0% of Fibonacci retracement is still on hold. A buying position is encouraged by the trend indicator.

Trade suggestion

Buy at 0.68015, Stop loss at 0.67653, Take profit at 0.68371

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