The New Zealand Dollar continued to drift lower on Friday, pressured by a strengthening U.S. Dollar and after failing to shake the negative effects of Thursday’s bearish ANZ business confidence survey that showed companies becoming more pessimistic about the economy since the global financial crisis in 2009. The ANZ Business Confidence Index fell 8 points to -52.3 in August.
At 20:45 GMT, the NZD/USD is trading .6309, down 0.0003 or -0.06%.
“The outlook for the economy appears to be deteriorating further, with firms extremely downbeat despite easier monetary conditions, fairly robust commodity prices, and positive population growth. Whatever the cause, the risk is rising that it becomes self-fulfilling. The decline in inflation expectations from 1.8% last month to 1.7% will be of particular concern to the Reserve Bank,” says Sharon Zollner, chief economist at ANZ.
Daily Technical Analysis
The main trend is down according to the daily swing chart. The NZD/USD is in no position to change the main trend to up. At this point in the prolonged move down in terms of price and time, all counter-trend bulls can hope for is a closing price reversal bottom.
Even if there is a closing price reversal bottom, it won’t mean the trend is changing to up. All it will indicate is the buying is getting stronger, or that the selling is getting weaker.
To look at how weak the NZD/USD currently is, the last time it posted two consecutive higher-highs was on July 18-July 19.
This week, the NZD/USD crossed to the weak side of its January 20, 2016 main bottom at .6346. Its next target is the August 24, 2015 main bottom at .6207.
Overcoming .6346 will indicate the selling is getting weaker, or the buying stronger. This won’t be enough to change the trend, but could produce a near-term short-covering rally.
The minor trend is also down. Taking out .6588 will change the minor trend to up, but this will only shift momentum to the upside.
This article was originally posted on FX Empire
More From FXEMPIRE:
- GBP/JPY Weekly Price Forecast – British pound continues to find resistance above
- Silver Weekly Price Forecast – Silver markets exploded to the upside
- GBP/USD Weekly Price Forecast – British pound consolidates for the week
- U.S. Dollar Index Futures (DX) Technical Analysis – Spikes Higher as Euro Sinks; U.S. Investors Cut Foreign Exposure
- Weekly Wrap –Yield Curve Inversions, Trade, and Brexit Drove the Majors
- Forex Daily Recap – Fiber Drenched in Red over Downbeat Eurozone CPI