NZD trades mixed after rate decision

A bearish technical event has been identified in the NZD/USD.

Charts (3)

The US Dollar was under pressure against all of its major pairs on Wednesday except for the GBP and JPY. On the U.S. economic data front, U.S. consumer prices rose 0.6% in July on month, above the 0.3% estimate following a 0.6% increase in June. Excluding food and fuel costs, core CPI also rose 0.6% from the prior month making it the largest gain since 1991. Finally, the July budget deficit narrowed to $63 billion from $119.7 billion a year ago.

On Thursday,  jobless claims for the week ended Aug 8th are likely to come in at 1150K, down from 1186K in the prior week. Import prices are expected to continue to increase with a slight gain of 0.6% on month in July from a gain of 1.4% in June. 


The Euro was higher against all of its major pairs except for the CHF. In Europe, the European Commission has reported June industrial production at +9.1% (vs +10.0% on month expected). The U.K. Office for National Statistics has posted 2Q GDP at -20.4% on quarter (vs -20.5% expected), June industrial production at +9.3 (vs +9.2% on month expected), manufacturing production at +11.0% (vs +10.0% on month expected) and trade balance at 5.3 billion pounds surplus (vs 2.6 billion pounds surplus expected).

The Australian dollar was mixed against all of its major pairs.


The Reserve Bank of New Zealand kept its key interest rate at 0.25%, which was widely expected by economists. The RBNZ is also expanding its large scale asset purchase program by up to $100 billion NZD. 

Using the "technical Insight" research tool under the Market Analysis tab, our automated pattern recognition software has identified a bearish signal in the NZD/USD

A triple moving average crossover (4-day, 9-day, 18 day)



Source: GAIN Capital, "Technical Insight"

This tells us the currency pair is generally in an established trend (bullish or bearish) for the time horizon represented by the moving average periods.

Moving averages are used to smooth out the volatility or "noise" in the price series, to make it easier to discover the underlying trend. By plotting the average price over the last several bars, the line is less "jerky" than plotting the actual prices. In the triple crossover method, a bullish signal is generated when a faster moving average (4 bar) crosses above an intermediate moving average (9 bar), which in turn crosses above a slower moving average (18 bar). In this state, the price is likely in an established uptrend. The opposite is true when the 4 bar crosses below the 9 bar which in turn crosses below the 18 bar, triggering a bearish event like in this case. 


Happy Trading

More from Forex

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.