The New Zealand dollar is trying to turn things around midday in Wednesday trading, as we are looking to determine the next move here.
NZD/USD
The New Zealand dollar is pretty noisy at the moment, but has recovered to get back to basically break-even for the day as we roll into the New York session.
The interest rate differential continues to be a major problem for the Kiwi dollar, but we are approaching a fairly oversold condition. The stochastic oscillator is below 10 at the moment, but I also recognize that the interest rate differential continues to make the U.S. dollar much more attractive.
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We have a Federal Reserve interest rate decision during the session today, and that will be a potential major mover. The market is particularly watching the Federal Reserve press conference, as the 25-basis-point rate hike for the session is pretty much baked in everywhere. We will be looking to see if there's any forward guidance of further tightening out of the United States of America, and at the same time, the RBNZ looks like it is fairly dovish.
New Zealand's particularly sensitive to the oil shocks coming out of Asia
New Zealand's particularly sensitive to the oil shocks coming out of Asia, as more of its crude comes via that route from the Persian Gulf, the Strait of Hormuz, etc. Also, the New Zealand economy is so attached to other parts of Asia, so it all ties together to make a certain amount of sense.
I look at rallies at this point as more likely than not going to be selling opportunities. The 0.58 level is an area that I would expect to see a little bit of resistance. If we break above there, then we have the moving averages closer to the 0.5850 level.
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