{"id":60100,"date":"2014-09-10T02:48:40","date_gmt":"2014-09-10T06:48:40","guid":{"rendered":"http:\/\/countingpips.com\/?p=60100"},"modified":"2014-09-10T06:33:14","modified_gmt":"2014-09-10T10:33:14","slug":"the-rbnz-not-a-matter-of-what-they-do-but-what-they-say","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/09\/the-rbnz-not-a-matter-of-what-they-do-but-what-they-say\/","title":{"rendered":"The RBNZ: Not a matter of what they do, but what they say"},"content":{"rendered":"
September 10, 2014<\/div>
\r\n<\/div><\/div>

Article by ForexTime<\/a><\/p>\n

The NZDUSD has been on quite a downward spiral since the Reserve Bank of New Zealand (RBNZ) expressed an intention to pause monetary tightening, following three consecutive rate hikes earlier this year.<\/p>\n

A continuation of weak economic data has followed, suggesting that the New Zealand economy might be struggling to cope with the rate adjustments. Although I am expecting the RBNZ to leave rates unchanged this month, it is a matter of what the central bank decision makers say after the interest rate decision which will be a key influence on what direction the Kiwi takes over the next period.<\/p>\n

If the Monetary Policy Statement suggests the central bank remain keen on bringing interest rates back towards a neutral level (4%), investors should be wary of others pricing in a future rate increase from the RBNZ before 2014 concludes. Similarly, a hint that monetary tightening may resume in early 2015 might tempt investors back towards the Kiwi.<\/p>\n

Economic data from New Zealand might have been weak in recent months, including dairy prices declining by an incredible 40%, but the RBNZ has always indicated that risks within the New Zealand housing sector, immigration and inflation would be the catalyst behind rate hikes.<\/p>\n

If there are indications from Wednesday\u2019s Monetary Policy Statement that the central bank continues to see risks within these areas, Kiwi appreciation should be on the cards.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

From a technical standpoint on the Daily timeframe, the pair looks soft and has been following a bearish trendline for a while. At present, it appears investors are not pricing in any movement in rates from the RBNZ on Wednesday, which explains why the NZDUSD reached its lowest valuation (0.8230) since February on Tuesday.<\/p>\n

However, both the RSI and Stochastic Oscillator are each suggesting that the Kiwi is currently oversold. Both of these indicators have developed quite a strong correlation with the NZDUSD in the past, with the pair refusing to stay in the oversold boundaries for long. I am curious about the prospect of a more hawkish than expected statement from the RBNZ encouraging the Kiwi to make upward moves back towards the trendline. Such a move would likely find resistance around 0.8282.<\/p>\n

Written by Jameel Ahmad, Chief Market Analyst at FXTM.<\/b><\/p>\n

For more information please visit: Forex Time<\/a><\/p>\n

Disclaimer:<\/b> The content in this article comprises personal opinions and ideas and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime Ltd, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/p>\n

Risk Warning:<\/b> There is a high level of risk involved with trading leveraged products such as forex and CFDs. You should not risk more than you can afford to lose, it is possible that you may lose more than your initial investment. You should not trade unless you fully understand the true extent of your exposure to the risk of loss. When trading, you must always take into consideration your level of experience. If the risks involved seem unclear to you, please seek independent financial advice.<\/p>\n

\n

\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime The NZDUSD has been on quite a downward spiral since the Reserve Bank of New Zealand (RBNZ) expressed an intention to pause monetary tightening, following three consecutive rate hikes earlier this year. A continuation of weak economic data has followed, suggesting that the New Zealand economy might be struggling to cope with […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-60100","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=60100"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60100\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=60100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=60100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=60100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}