Kiwi bears got some pips in last week after a bit of risk aversion and profit-taking.
Can the comdoll recover its losses this week?
I’ve got a list of potential catalysts that might move the New Zealand dollar in the next few days:
Quarterly CPI (Jan 21, 9:45 pm GMT)
- Consumer prices rose by 0.7% from Q2 to Q3 2020 against market estimates of a 0.9% uptick
- Annual prices dipped from 1.5% to 1.4%, the lowest since Q1 2018, as the pandemic extends its impact on consumer activity
- Optimism over a stimulus deal in the U.S., uncertainty over the second Presidential debate, and NZ’s CPI miss helped drag NZD about 15 pips lower during the Asian session
- Analysts see quarterly inflation cooling further to 0.5% in Q4 2020
- Annual prices could slow down from 1.4% to 1.1%
Business surveys
- The Reserve Bank of New Zealand (RBNZ) pays close attention to business sentiment so you should too
- NZIER’s business confidence (Jan 19, 9:00 pm GMT) could improve from -40 to -30 in Q4 2020
- BusinessNZ’s manufacturing index (Jan 21, 9:30 pm GMT) seen weakening from 55.3 to 53.7
Market risk sentiment
- China’s data dump today and the People’s Bank of China (PBoC)’s loan prime rate update on Wednesday can cause some ripples among NZD’s major pairs
- PMI releases from major economies like the U.S., Eurozone, U.K., Japan, and Australia will paint a picture of the pace of manufacturing activity recovery
- Civil disturbance around Biden’s inauguration can influence the appetite for high-yielding bets like the Kiwi
- Rising coronavirus cases, lockdown prospects, and vaccine updates will continue to influence overall risk-taking in the markets
Technical snapshot
- Stochastic considers the Kiwi “overbought” against the euro
- NZD may be “oversold” against AUD, GBP, and CAD on the daily time frame
- The comdoll is (mostly) in neutral territory against the safe-havens
- Daily EMAs reflect the short-term bearish pressure across the board
- NZD remains mostly bullish against EUR
- Kiwi is on short and long-term bearish trends against the Aussie
- Kiwi was most volatile against the safe-havens and the pound in the last seven days
