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Forex Market: NZD/USD trading outlook for August 15th

Friday’s trade (in GMT terms) saw NZD/USD within the range of 0.7186-0.7257. The pair closed at 0.7197, shedding 0.17% compared to Thursdays close. It has been the 13th drop in the past 23 trading days. In weekly terms, NZD/USD added 0.76% to its value during the current week. It has been the 16th gain in the past 32 weeks. The major pair has gone down 0.18% so far during the current month, following a 1.04% advance in July.

On Monday (August 15th) NZD/USD trading may be influenced by the following macroeconomic reports as listed below.

Fundamentals

United States

NY Empire State Manufacturing Index

The New York Empire State Manufacturing Index probably increased to a reading of 2.00 in August, according to the median forecast by experts, from 0.55 in the prior month. If so, this would be the third straight month, when the gauge inhabited positive territory.

In July, the gauges for new orders (-1.82 down from 10.9 in the preceding month) and shipments (0.7 down from 9.32 in the prior month) dropped, the sub-index for inventories stood into negative territory (-8.8, up from -15.31 in June), while the sub-index for labor market conditions fell below the key 0.00 level, reaching -4.4. Respondents in the survey were less optimistic in regard to the six-month outlook, while their capital spending plans remained without change.

Index readings above 0.00 are indicative of improving business conditions in the region. Higher-than-anticipated index values will usually have a moderate bullish effect on the US dollar. The Federal Reserve Bank of New York is expected to release the official reading at 12:30 GMT.

NAHB Housing Market Index

The National Association of Home Builders (NAHB) Housing Market Index probably advanced to a reading of 60.0 in August, according to market expectations, from 59.0 in July. If so, August would be the 26th consecutive month, when the gauge stood in the area above 50.0. In July, the sub-index of sales expectations dropped to a level of 66.0 from 69.0 in the prior month, the gauge of buyer traffic slipped to 45.0 from 46.0 in June, while the gauge of current sales conditions ticked down to 63.0 from 64.0 in June.

The indicator is based on a monthly survey in regard to current home sales and expected sales in the coming six months. Values above the key level of 50.0 indicate that housing market conditions are good. Therefore, higher-than-projected readings would provide a moderate support to the US dollar. The official report is scheduled for release at 14:00 GMT.

Correlation with other Majors

Taking into account the business week ended on August 12th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

NZD/USD to EUR/USD (0.8743, or very strong)
NZD/USD to AUD/USD (0.6480, or strong)
NZD/USD to GBP/USD (-0.6690, or strong)
NZD/USD to USD/JPY (-0.7432, or strong)
NZD/USD to USD/CAD (-0.8421, or very strong)
NZD/USD to USD/CHF (-0.9558, or very strong)

1. During the examined period NZD/USD moved strongly in one and the same direction with AUD/USD, while moving strongly in the opposite direction compared to GBP/USD and USD/JPY.

2. NZD/USD moved almost equally in one and the same direction with EUR/USD during the week, while moving almost equally in the opposite direction compared to USD/CAD and USD/CHF. This relationship has been the most pronounced between NZD/USD and USD/CHF.

Daily, Weekly and Monthly Pivot Levels

By employing the Camarilla calculation method, the Monday levels of importance for NZD/USD are presented as follows:

R1 – 0.7204
R2 – 0.7210
R3 (Range Resistance – Sell) – 0.7217
R4 (Long Breakout) – 0.7236
R5 (Breakout Target 1) – 0.7259
R6 (Breakout Target 2) – 0.7268

S1 – 0.7190
S2 – 0.7184
S3 (Range Support – Buy) – 0.7177
S4 (Short Breakout) – 0.7158
S5 (Breakout Target 1) – 0.7135
S6 (Breakout Target 2) – 0.7126

By using the traditional method of calculation, the weekly levels of importance for NZD/USD are presented as follows:

Central Pivot Point – 0.7209
R1 – 0.7330
R2 – 0.7464
R3 – 0.7585
R4 – 0.7707

S1 – 0.7075
S2 – 0.6954
S3 – 0.6820
S4 – 0.6687

In monthly terms, for NZD/USD we have the following pivots:

Central Pivot Point – 0.7163
R1 – 0.7373
R2 – 0.7537
R3 – 0.7747
R4 – 0.7958

S1 – 0.6999
S2 – 0.6789
S3 – 0.6625
S4 – 0.6462

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