ANZ research “Business confidence slipped further into the red, led by agriculture. Key survey indicators that more closely correlate to GDP also weakened, with several at their lowest levels since 2009. That’s a worry. Business confidence remains on the ropes, hitting a new six-year low in August. A net 29% of businesses are pessimistic about the general economy, the fifth consecutive monthly decline”.
Today at Asia pacific session, the NZ Overseas trade index on quarterly basis hits the wires on a positive side. The merchandise (goods) terms of trade rose 1.3 percent in the June 2015 quarter, due to export prices rising more than import prices, Statistics New Zealand said today. This rise follows a 1.2 percent rise in the March quarter.
Exported goods prices rose 2.1 percent, with dairy products (up 6.0 percent) contributing the most to the rise.
“Although dairy prices were up in the June quarter, helped by a weaker dollar, they are 28 percent lower than in the March quarter last year,” prices manager Chris Pike said.
Upcoming event: The Global Dairy Trade price index due today. The earlier event on August 18th, 2015, change in GDT price index from the previous event rose 14.8%.
We guess the lower NZD likely to support the dairy prices inch higher.
Technical view: The cross pause the four consecutive falling streak, managed to erase most the earlier losses closed with 3.5% gains. The cross has been moving higher for five consecutive months. In the August month, the cross rejected at 200MEma but managed to close above 100Mema.
After the NZ Overseas trade data hits the wires, the NZD moving higher.
The hourly oscillators indicating highly overbought. Intraday support finds at 1.7580, 1.7520 and 1.7460.
The 100Mema finds at 1.7590. We are expecting the commodity currencies likely to bounce from the multi-year lows. Earlier we forecast CAD because we advised buying on WTI. In case, if the GDT data ticks higher the NZD likely to boost.
Resistance seems 1.7700 and 1.7770. The bullish momentum back above 1.7770 aims at 1.7800, 1.7860 and 1.7930.
Selling open below 1.7600 targets at 1.7530,1.7500 and 1.7470.