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NZD/USD Trading - Quarterly GDP - 21 Dec 2016

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NZD/USD Trading chart 21 Dec 2016
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New Zealand Q3 GDP expected to rise 0.8%

The third quarter GDP data from New Zealand is expected to be released today with expectations showing a 0.8% increase on a quarterly basis. This would be slower than the 0.9% increase registered in the second quarter. However, despite weaker GDP expectations, it is unlikely that the data will offer much in terms of justifications for further rate cuts from the RBNZ which was explicitly ruled out by the governor Wheeler in a speech few weeks ago. The kiwi continues to decline against a strong U.S. dollar which touched fresh 14-year highs this week, led by hawkish Fed and expectations on fiscal stimulus next year.

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In the overnight session, New Zealand's trade deficit figures showed a deficit of $705 million in November

This was higher than what the markets were expecting. However, compared to October's $815 million, November's trade deficit was seen to be an improvement. On a seasonally adjusted basis, exports were down 12% in November reversing the gains from October.

Meat exports posted a significant drag on export volumes. Imports were down by 9% during the month. The kiwi managed to post some modest gains in early trading session today as traders await the quarterly GDP report later this evening.

NZDUSD has been posting strong declines for the past five consecutive days which means that there is a risk of a short term retracement to the declines in the near term. While the daily chart yesterday showed prices falling to a fresh 6-month low, the kiwi managed to close modestly above the lows, but was still bearish.

How to trade binary

On the hourly chart, NZDUSD rallied towards the resistance at 0.6936 before reversing off this level. The main technical resistance sits at 0.7014 which could be breached in the near term. Traders can therefore look for NZDUSD to post a higher low above 0.6875 and purchase CALL options at 0.6936 for 21:00 GMT expiry time.

Asset: NZD/USD
Direction: Call
Target price: 0.6936
Expiry: 21:00 GMT

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