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Hugo in HTO Trading,

NZDUSD: Unemployment Rate data could knock NZD

On Friday the Reserve Bank of New Zealand left the Official Interest Rate unchanged at 3.5%. The high exchange rate, low global inflation and falling oil prices are causing traded goods inflation to be very weak. Adjustments either up or down, on future interest rate will depend on the emerging flow of economic data.

On today’s economic calendar we have from New Zealand the Employment change that is expected to stay unchanged at 0.8% and the Unemployment Rate for the 4th quarter is anticipated to fall from 5.4% to 5.3%. In the US we have the Factory Orders in December that is estimated to drop from -0.7% to -2.2%.

NZDUSD rallied 56 pips during yesterday and closed near the high of the day. The pair remains in a bearish phase and is dropped 6.28% since the start of the Year 2015. The stochastic in showing an oversold market but even with the pair well into oversold territory, we should not fight the strong downward trend.

Expecting upward move to a Fibonacci level at 0.74726 on a break above the 10-day moving average at 0.73741 (scenario 1) or a bounce from the Fibonacci level at 0.73741 could pull the pair down to a daily support at 0.7276 (scenario 2).