NZDUSD WEEKLY OUTLOOK; BULLISH OFFSET TERMINATES BEARISH PROGRESSIVE WAVE LEG C

FUNDAMENTAL BEAM

The New Zealand dollar dipped to new lows but managed to remain stable in a very turbulent week. The big event for the upcoming week is the release of employment data. Here is an outlook for the events moving the kiwi, and an updated technical analysis for NZD/USD.

The RBNZ left the interest rate unchanged at 2.5% as expected and made contradicting statements: on one hand, it wants to see a lower value for NZD, but on the other hand it sees interest rates rising in 2014 – a hawkish statement. The kiwi wanted to fly higher, but it was also hurt by the relatively hawkish FOMC statement in the US. The central bank in the US did not hint about a change in QE tapering plans. Where will this pair trade next?

Updates of major events during the week

1. ANZ Commodity Prices: Monday, 00:00. New Zealand relies on exports of commodities, mainly agricultural ones, for its economy. Rises in prices aid New Zealand. A rise of 0.9% was reported last month, and a more moderate rise is expected now.
2. Employment data: Monday, 21:45. Contrary to most developed economies, New Zealand releases employment data only once per quarter, making this data valuable for a long period of time. The level of employment rose by 0.4% in Q2, lower than the strong gain in Q1. A stronger growth in jobs is likely now. The unemployment rate disappointed with a rise to 6.4% and no change is likely in Q3. Another data point is the Labor Cost Index, which rose by 0.4% in Q2. All in all, this is a healthy job market.
3. RENZ House Price Index: Thursday, 21:00. Prices of homes have a strong impact on the New Zealand dollar, as foreign investment pours into this sector, and causes fears of a bubble. A rise of 0.8% was recorded in September. A similar number is expected in October.

TECHNICAL BEAM

Our prediction  on kiwi sometime ago described how far down this pair market price was suppose to slide down. However, the Greenback has not performed much as anticipated by fundamental analyst. 

Therefore, following a bridge of the bearish progression of the wave leg c at 0.8194- we expect NZDUSD to continue its upside progression up to the tune of 0.8844 for a weekly price target and even further to 0.8991.

NOTE: Price predictions produced by FibonacciPrice&PatternTrader may be affected by unforseen events like hurricane, earth quake, flood and other natural disasters consequently changing price patterns already predicted. Hence we advice strict adherence to money management techniques.

HAPPY TRADING