MG Network

something big isHappening!

In the mean time you can connect with us with via:

Copyright © Money Grows Network | Theme By Gooyaabi Templates

Money Grows Network

Archive

Powered by Blogger.

Welcome To Money Grows Network

Verified By

2006 - 2019 © www.moneygrows.net

Investments in financial products are subject to market risk. Some financial products, such as currency exchange, are highly speculative and any investment should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only.

Popular

Pages

Expert In

Name*


Message*

Correction is unlikely to be deep, AUD and NZD remain in a downward trend

The pace of distribution outside of China has led to large-scale sales in world markets. The US and European indices fell by 3-4%, the yield is approaching record low levels in 2016, the probability of a FOMC rate cut by the end of the year is 75%, oil fell by 4% on Monday.

The virus does not have a noticeable effect on the US economy, unlike the Asia-Pacific countries or Europe, so the dollar remains a favorite in the foreign exchange market. A large package of macro-statistics will be published on Thursday, in particular, annual GDP data and a report on orders for durable goods in January. The dollar will go into a shallow correction if the data turns out to be disappointing, otherwise, only the yen will be able to compete with it by the end of the week.

NZDUSD

The COVID-19 virus continues to have a devastating effect on the global economy. The main blow in New Zealand was dealt to exporters, but if the Chinese economy continues to slow down at the same pace, then problems will begin not only with exports, but also with imports. China is not only a supplier of toys or electronics, it is also a key supplier of a number of goods that are crucial for construction, manufacturing and agriculture.

Since it is impossible to reliably assume a return to China's normal economic activity, the risks are shifting towards worse. ANZ Bank forecasts GDP growth in Q1 of just 0.1%, which is close to stagnation, while 0.5% for the second quarter, and this is provided that the pandemic remains under control. Only in terms of employment can the forecasts be considered neutral, and all other key parameters are expected to deteriorate.

analytics5e55bf2aa8ead.jpg

Despite the fact that the NZDUSD rate has gone significantly lower than the estimated fair price, all that kiwi bulls can count on is just a correction within the current trend. Until January, the flow of capital in the main financial markets of New Zealand was positive; by the beginning of February, a net long position in kiwi was formed on the CME exchange, which gave good chances for the New Zealand dollar to continue to grow. However, the coronavirus has confused all the cards, the capital goes into reliable assets, waiting for troubled times, and the direction for NZD remains bearish.

analytics5e55bf3e0668e.jpg

All you can count on is correctional growth, since the kiwi is oversold for a short time. The resistance zone is 0.6445/60, with growth to this level, you can sell with the target of 0.6250, where a short consolidation is possible before the breakout of support of 0.6203.

AUDUSD

The aussie has a slightly higher chance of corrective growth than the NZD, since the CFTC report was neutral and not negative for it, and in general, forecasts for the stability of the Australian economy still look confident. Large-scale fires did not lead to a reorientation of capital flows, and what we see at the moment is a reaction to the virus and following the market. The fair value of the aussie is higher than the current spot value, so the chances of a corrective pullback are pretty high.

analytics5e55bf5945323.jpg

The January employment report turned out to be slightly better than expected, mainly due to an increase in full employment and a decrease in partial employment, but the PMI together showed activity below the level of 50p, which under deteriorating external conditions can lead to an overestimation of the main forecast indicators. Instead of growth, the PMI in the services sector showed a decline to 48.4p against 50.6p a month earlier, there were minimal changes in the manufacturing industry, the dynamics of the composite index was depressing - there was no way to consider the process positive.

analytics5e55bf6c4bdd0.jpg

Corrective growth to 0.6660/75 is quite likely, but an upward movement will not indicate a trend reversal, resistance is unlikely to be passed and will serve only as the basis for sales from more favorable levels. The long-term goal is in the region of 0.60 - the low of 2008, and if the situation with the virus does not begin to improve, its achievement will happen faster than it seemed a week ago.

The material has been provided by InstaForex Company - www.instaforex.com