Skip to content

XTB TRADEBEAT

NZD gains supported by improving GDT results

Summary:

  • NZD began the day higher thanks to hawkish rhetoric from RBNZ’s Spencer
  • Latest GDT auction results rise and support Kiwi strength
  • NZDUSD forming a possible base around 0.68

The New Zealand dollar has been one of the best performers in the G10 today. The Kiwi was already higher by the time European traders got to their desks thanks largely to comments from RBNZ Governor Spencer who said that it might be time for monetary policy to put more weight on output, employment and financial stability rather than inflation. 

The New Zealand dollar has experience a fairly large slide in recent months, due in part to some sharp drops in the milk price. The fortnightly GDT price index auction is widely seen as a global benchmark for dairy prices, and seeing as this is New Zealand’s largest export it can be known to have an impact on the NZD.  

The latest results this afternoon have seen a first rise in 5 for the index, with a 0.4% increase reported. The prior two readings in particular have been negative with successive drops of more than 3% signalling sharp contractions in price and therefore today’s rise is a positive development. 

link do file download link

 The GDT price index rose by 0.4% in the latest auction, ending a run of 4 substantial declines. Source: globaldairytrade.info

 A closer look at the NZDUSD reveals the market may be testing an important level with a falling trendline dating back to late August coming in to play. There could be an inverse head and shoulder forming with the head at the low of 0.6782 and the trendline a possible neckline. 

link do file download link

 NZDUSD is looking to recover some of the declines seen in recent months. A break above the falling trendline could spark a move higher. Source: xStation

Disclaimer

This article is provided for general information purposes only. Any opinions, analyses, prices or other content is provided for educational purposes and does not constitute investment advice or a recommendation. Any research has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Any information provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

Past performance is not necessarily indicative of future results, and any person acting on this information does so entirely at their own risk, we do not accept liability for any loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.