NZD/USD – Steady Ahead of Yellen Testimony, NZ Manufacturing Report

NZD/USD is unchanged on Wednesday, as the pair is trading at 0.6640 early in the North American session. In economic news, Janet Yellen will testify before the House Financial Services Committee in Washington. With the markets looking for clues regarding the timing of another rate hike, this event could be a market-mover, so traders should be prepared for possible volatility in the currency markets. The US will release Crude Oil Inventories, which has posted sharp surpluses in the past two readings. It’s a very quiet week on the release front in New Zealand, with just two releases this week. On Wednesday, we’ll get a look at Business NZ Manufacturing Index. Recent readings have indicated steady expansion in the manufacturing sector. This will be followed by inflation data on Thursday, with the release of the Food Price Index.

Fed chair Janet Yellen will testify before Congress on Wednesday and Thursday, and will likely face some pointed questions from lawmakers. After a historic rate hike in December, the Fed remained on the sidelines in January, and its dovish policy statement reflected a softening in US economic growth. Does this mean a March rate move is off the table? Naturally, the Fed will not give a clear answer to this question, but the markets will be looking for some clarity from Janet Yellen about the Fed’s monetary plans. If Yellen paints a pessimistic picture of the economy, the US dollar could lose ground. Just a couple of months ago, the Fed was hinting that we could see a series of rate hikes in 2016, but the recent turmoil in global markets has drastically changed these plans, with some experts openly questioning if the Fed will make any more moves before next year.

Wednesday (Feb. 10)

• 10:00 Federal Reserve Chair Janet Yellen Testifies
• 10:30 US Crude Oil Inventories. Estimate 3.1M
• 13:01 US 10-year Bond Auction
• 14:00 US Federal Budget Balance. Estimate 10.3B
• 16:30 New Zealand Business NZ Manufacturing Index

Upcoming Key Events

Thursday (Feb. 11)

• 10:00 Federal Reserve Chair Janet Yellen Testifies

*Key releases are highlighted in bold

*All release times are EST

NZD/USD for Wednesday, February 10, 2016

NZD/USD February 10 at 9:00 EST

Open: 0.6642 Low: 0.6604 High: 0.6671 Close: 0.6643

NZD/USD Technical

• NZD/USD posted slight losses in the Asian session but recovered in European trade
• 0.6605 is a weak support line
• There is resistance at 0.6738

Further levels in both directions:

• Below: 0.6605, 0.6449, 0.6344 and 0.6233
• Above: 0.6738, 0.6897 and 0.7011

OANDA’s Open Positions Ratio

The NZD/USD ratio is unchanged, consistent with the lack of movement from the pair. The ratio remains close to an even split of long and short positions, which is indicative of a lack of trader bias as to which direction the pair will head next.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.