The NBNZ Business Confidence Index is a diffusion index based on a broad survey of business sectors in the New Zealand economy. A reading which is higher than the market forecast is bullish for the New Zealand dollar.
Here are all the details, and 5 possible outcomes for NZD/USD.
Published on Thursday at 00:00 GMT.
Indicator Background
The NBNZ Business Confidence Index is based on a survey of manufacturers, retailers and service providers, among others. The index’s direction and rate of change are carefully scrutinized by analysts and traders looking for an indication of which direction the economy is headed.
The index posted a strong reading of 28.0 in February, its highest level since September 2011. The forecast for March calls for a drop in the index, with a prediction of 23.0.
Sentiments and levels
A lower demand in China for imports, as well as a lower PMI in the economic giant, is a serious cause of concern New Zealand. In addition, the absence of QE in the US, is also weighing on the kiwi. So, the overall sentiment is bearish on NZD/USD towards this release.
Technical levels, from top to bottom: 84, 83.40, 83.20, 82.40, 81.90, 81 and 80.60.
5 Scenarios
- Within expectations: 18.0 to 28.0: In such a case, NZD/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 28.1.1 to 33.0: An unexpected higher reading can send NZD/USD above one resistance level.
- Well above expectations: Above 33.0: A sharp increase in business confidence could propel the pair above two or more resistance levels.
- Below expectations: 13.0 to 17.9: A reading lower than forecast could push NZD/USD below one support level.
- Well below expectations: Below 13.0: An unexpected weak reading could push the pair below two or more support levels.
For more on the New Zealand dollar, see the NZD/USD forecast.