Talking Points:
– NZD/USD Outlook Hinges on RBNZ; Forward-Guidance in Focus.
– Gold (XAUUSD)$1,155 Support at Risk as Bearish RSI Momentum Gathers Pace.
– USDOLLAR Approaching Channel Resistance Ahead of U.S. Retail Sales.
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NZD/USD
Chart – Created Using FXCM Marketscope 2.0
Even though the Reserve Bank of New Zealand (RBNZ) is widely expected to keep the cash rate at 3.50%, NZD/USD may face fresh 2015 lows should the central bank further delay its normalization cycle and implement a dovish twist to the forward-guidance for monetary policy.
As the Relative Strength Index (RSI) retains the bearish momentum, a break of the February low (0.7175) would expose 0.7140-50 (78.6% expansion).
Despite the recent weakness in NZD/USD, the DailyFX Speculative Sentiment Index (SSI) shows retail crowd has flipped net-long ahead of RBNZ, with the ratio currently standing at +1.06.
XAU/USD
Chart – Created Using FXCM Marketscope 2.0
String of lower-highs in Gold (XAU/USD) favors the approach to ‘sell-bounces’ especially as the RSI retains the bearish momentum and pushes deeper into oversold territory.
Still appears as though gold is being treated more as a commodity rather than a currency as it largely moves in-line with silver (XAG/USD).
Break of the $1,155 (61.8% retracement) support zone would bring up $1,136 (100% expansion) next on the radar.
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USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
12076.18
12084.41
12031.1
0.28
104.32%
Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar continues to clear near-term targets as the bullish RSI momentum gathers pace; will continue to look for further strength as the oscillator pushes deeper into oversold territory.
Despite expectations of seeing a 0.3% rebound in U.S. Retail Sales, may see private-sector continue to disappoint as wage growth remains subdued.
Looking for a close above 12,073 (100% expansion) to favor a further advance; will watch the 12,100 handle for psychological resistance.
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Release
GMT
Expected
Actual
MBA Mortgage Applications (MAR 6)
11:00
—
-1.3%
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— Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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Source: Daily fx