Financial markets are in a sleeping mode with the hope of awakening with the help of a Fed chairman's speech this afternoon. Asia limited its activity with zero premises from the currency market. Japanese Nikkei225 has found the strength to increase by 1.07%, but in China, the indexes are losing - Shanghai Composite is lower by 1.12%.
On Tuesday 27th of February, the event calendar is busy with important data releases. During the London session, Eurozone will post M3 Money Supply and Private Loans data and Germany will issue Preliminary Consumer Price Index data. During the US session, there will be Durable Goods Orders and CB Consumer Confidence data revealed and Federal Reserve Chairman Jerome Powell speech.
NZD/USD analysis for 27/02/2018:
The biggest drop in price overnight was noted on NZD due to disappointment in the New Zealand trade balance. January brought an unexpected deficit of NZD 566 million, after a surplus of NZD 596 million in December. A positive Trade Balance (surplus) indicates that exports are greater than imports. When imports exceed exports, the country experiences a trade deficit. Because foreign goods are usually purchased using foreign currency, trade deficits usually reflect currency leaking out of the country. Such currency outflows may lead to a natural depreciation unless countered by comparable capital inflows (inflows in the form of investments, FDI - where foreigners investing in local equity, bond or real estates markets). At a bare minimum, deficits fundamentally weigh down the value of the currency.
Let's now take a look at the NZD/USD technical picture at the various intraday time frames. The market still moves inside of the golden descending channel and the market conditions are now oversold. Moreover, there is a visible bullish divergence between the price and the momentum oscillator, which might indicate a possible short-term bounce towards the level of 0.7317 or even 0.7345. Nevertheless, the key intraday support is seen at the level of 0.7268 - 07275 zone, so if this level is clearly violated, the price might fall towards the next support at the level of 0.7239.
