Market News & Analysis


Top Story

NZ Business Sentiment Bounces From 11-Year Lows

Add business sentiment to the growing list of economic data that continues to outperform expectations in NZ.


Back in Q3 the index has dropped to its lowest level since 2009 at -40. And whilst Q4’s read is still technically pessimistic at -21, it has almost halved in just one quarter and posted its strongest quarter over quarter rebound in four years of +19 points. Still, the Service sector stands at -26 and is more pessimistic than the manufacturing sector, and firms remain cautious about hiring and investing. So, business sentiment is not completely out of the gloomy woods, it is heading the right direction to make an escape.

We highlighted four NZD crosses we were closely monitoring for a potential turning point, 3 of which have a positive carry. Out of the four, NZD/JPY is clearly taken the lead and potentially heading to retest December’s high. A weaker yen in anticipation of tomorrow’s US-Sino trade deal being signed is clearly helping to support. Of course, it will make an ideal candidate for bears to attack of it spectacularly falls through last minute, but this is an outside chance at present.



NZD/JPY: Overall, the daily trend structure remains firmly bullish. An elongated bullish hammer respected the 50 and 200-day eMA’s, and the 50 had already crossed above the200 whilst both point higher. More recently, price action has respected the 20-day eMA and yesterday’s candle closed at a 7-day high.

  • Near-term bias remains bullish above 72.30, although the daily trend remains bullish above 71.50.
  • Bulls could seek dips or continuation patterns on intraday timeframes, with a view for it to re-test December


Price Action Update:

EUR/NZD: The bias still remains bearish below 1.6868, although a pick-up of Euro Zone data means it’s yet to roll over. So until either NZ or EZ data underperforms expectations, we could find price action is to remain choppy.

NZD/USD: It’s just about hanging onto its bullish trendline, a break of which invalidates the bullish bias. Yet if it is to rebound from current levels, it will retain its bullish structure. One to watch for now.

NZD/CHF: It’s back below the 200-day eMA with the 50 and 20-day curling lower. So whilst it remais above key support around 0.6405, momentum is pointing the wrong way. We’d prefer to see bullish momentum return before becoming more confident it will break to new highs.


Related Analysis:
The Kiwi – Low Hanging Fruit?


Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.