By FXEmpire.com

Introduction: The recent strength of the kiwi, a currency sometimes overlooked by traders, made its moves much more predictable. This applies to support and resistance lines alike. This is a very safe pair to trade, not a great deal of volatility but predictability.

Weekly Analysis and Recommendation:
The NZD/USD ended at 0.7958 spending most of the week at the whim of the USD and the overall effect of negative data from China. The NZD trade balance was disappointing, but the presentation of the next annual budget by Bill English was received well by the markets and endorsed by the OECD.

Over the week, the pair bounced between highs and lows as shown in the chart below:

Commodity currencies this week were stuck between the USD and the JPY as investors ran for cover over concerns with Greece’s possible exit from the euro and the growing problems with Spanish banks. The markets were also upset by statements from the IMF, the OECD, the World Bank and the IIF, all trying to push the EU into some plan of action. After the much expected EU mini summit with the disappointing conclusion, investors shied away from everything associated with the EU as the euro plummeted to record lows.

All the pacific nations and commodity currencies suffered.

Major Economic Events for the week of May 21-25 actual v. forecast for Yen, the Aussie and the Kiwi

Currency

Actual

Forecast

Previous

NZD

Inflation Expectations q/q

2.4%

2.5%

JPY

Trade Balance

-0.48T

-0.60T

-0.62T

AUD

CB Leading Index m/m

0.2%

0.0%

AUD

MI Leading Index m/m

0.4%

0.0%

JPY

Overnight Call Rate

NZD

Trade Balance

355M

445M

186M

JPY

Tokyo Core CPI

-0.8%

-0.6%

-0.5%

Historical

Highest: 0.8816 USD on 31 Jul 2011.

Average: 0.7543 USD over this period.

Lowest: 0.6619 USD on 07 Jun 2010.

Economic Highlights of the coming week that affect the AUD, JPY, NZD and USD

Date

Time

Currency

Previous

May 28

23:30

JPY

Household Spending y/y

3.4%

23:50

JPY

Retail Sales y/y

10.3%

May 29

TBD

AUD

HIA New Home Sales m/m

-9.4%

13:00

USD

S&P/CS Composite-20 HPI y/y

-3.5%

14:00

USD

CB Consumer Confidence

69.2

22:45

NZD

Building Consents m/m

19.8%

May 30

1:30

AUD

Retail Sales m/m

0.9%

1:30

AUD

Construction Work Done q/q

-4.6%

14:00

USD

Pending Home Sales m/m

4.1%

23:50

JPY

Prelim Industrial Production m/m

1.3%

May 31

1:00

NZD

NBNZ Business Confidence

35.8

1:30

AUD

Building Approvals m/m

7.4%

1:30

AUD

Private Capital Expenditure q/q

-0.3%

1:30

AUD

Private Sector Credit m/m

0.4%

1:30

JPY

Average Cash Earnings y/y

1.3%

12:15

USD

ADP Non-Farm Employment Change

119K

12:30

USD

Prelim GDP q/q

2.2%

12:30

USD

Unemployment Claims

370K

13:45

USD

Chicago PMI

56.2

15:00

USD

Crude Oil Inventories

0.9M

23:50

JPY

Capital Spending q/y

7.6%

Jun 1

12:30

USD

Non-Farm Employment Change

115K

12:30

USD

Unemployment Rate

8.1%

12:30

USD

Core PCE Price Index m/m

0.2%

12:30

USD

Personal Spending m/m

0.3%

14:00

USD

ISM Manufacturing PMI

54.8

Upcoming Government Bond Auctions

Date Time Country

May 28- n/a UK

May 28 09:10 Italy

May 29 00:30 Japan

May 29 09:10 Italy

May 29 09:10 Norway

May 30 09:10 Italy

May 30 09:10 Sweden

Click here a current NZD/USD Chart.

Originally posted here