In the day’s exchanges of the NZD/USD, the New Zealand dollar is hoped to break out of its consolidation channel and make gains opposite the US dollar. The Kiwi currency looks to take advantage of economic releases this week that US housing and orders of durable goods are expected to show that the world’s biggest economy is improving, overshadowing concern about Europe’s debt crisis.
The Kiwi, driven mostly by risk confidence is setting itself for some upside as the New Zealand equity market is showing that demand is on a rise. New Zealand’s benchmark NZX 50 index has inched up 0.42 percent to 3,676.54 amid other Asian stocks starting off flatly. This poses prospects of a slightly bullish market for the Kiwi-Greenback.
A short glimpse at the technical chart shows that after finding bottom at the 0.8061 price level, the candlesticks have been caught between the 0.8079 lower psychological limit and the 0.8102 upper psychological handle. Looking at price activity a little closer would show that the price formation is being plotted at the upper region of the aforesaid channel, which could be interpreted as a good signal that prices are, at the very least, gaining.
On the economic docket, a survey of business managers on inflation expectations for the next two years was released today. Analysts perceive that inflation will remain subdued, enabling the Reserve Bank to keep interest rates on hold for longer. A 2.3 percent reading was released for Q3, lower than the 2.4 percent record in Q2.
Reports from the US this week are anticipated to show that combined purchases of new and existing houses increased to a 4.89 Million annual rate in July from a 4.72 Million pace in June, according to the median forecasts in surveys of economists. Also, orders for durable goods are projected to have climbed the most this year, according to economist estimates.
Considering the effects these fundamental data have on the currency exchanges, the New Zealand currency is set to benefit. As such, a long position is advised for the NZD/USD today.
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