NZ dollar holds steady ahead of final Q4 GDP release
The New Zealand dollar was little changed even after the relatively positive economic numbers from the country. According to the Reserve Bank of New Zealand (RBNZ), the country’s current account deficit widened by 1.6 billion NZ dollars to 2.1 billion. This deficit was mostly because of a rise in goods imports and a decline in services exports. The data came a day before the final reading of the country’s fourth-quarter GDP numbers. Economists believe that the economy expanded by 0.1% leading to an annualised increase of 0.5%.
The euro was also little changed today as traders reacted to the latest EU inflation numbers. According to Eurostat, the bloc’s total consumer prices rose by 0.2% in February, leading to an annualised increased of 0.9%. Core consumer prices increased by an annualised rate of 1.1% while CPI ex-tobacco rose by 0.8%. While these numbers are below the ECB’s target of 2.0%, analysts believe that the trend will keep rising as the bloc’s economy continues to recover.
The US dollar index rose slightly against most currency peers ahead of the Fed interest rate decision. The bank is expected to leave its policy tools like interest rates and quantitative easing policies unchanged. It will also address the recent bond yields rally and offer its annual growth forecast. Because of the recent stimulus, analysts expect the bank to boost its forecast from the previous 4.2% to between 7% and 8%. Growth will then retreat in the following years.
The EUR/USD rose slightly after the latest EU CPI numbers. The pair rose from 1.1884 to a high of 1.1912. On the hourly chart, the price is still between the important support and resistance levels of 1.1835 and 1.1990. It is also slightly below the 23.6% Fibonacci retracement level. Notably, it also seems to be forming a head and shoulders pattern. Therefore, while it is still too early to tell, there is a possibility that the pair will breakout lower as bears target the support at 1.1835.
The NZD/USD is tilting lower ahead of the latest New Zealand GDP data and Fed decision. On the four-hour chart, the price is below the important resistance level of 0.7240. It is also below the rising trendline that connects the lowest levels since January 28. It has also moved slightly below the 25-day moving average while the signal and histogram of the MACD are at the neutral level. Therefore, the pair may continue to drop as bears target the next support at 0.7130.
The USD/JPY price topped at 109.31 this month. On the four-hour chart, the price has formed a double-top pattern whose neckline is at 103.30. The Average True Range (ATR) has continued to drop, which is a sign of low volatility. It is slightly above the 25-day moving average. Therefore, the pair may experience some volatility after the Fed and BOJ rates decisions.