Forex - NZD/USD weekly outlook: May 20 - 24

Investing.com - The New Zealand dollar ended Friday’s session at a six-month low against its U.S. counterpart, as demand for the greenback was boosted after data showed that U.S. consumer sentiment rose more than expected in May, climbing to an almost six year high.

NZD/USD hit 0.8058 on Friday, the pair’s lowest since November 16; the pair subsequently consolidated at 0.8061 by close of trade on Friday, losing 2.78% for the week.

The pair is likely to find short-term support at 0.8051, the low from November 16 and resistance at 0.8176, Friday’s high.

The University of Michigan said its consumer sentiment index jumped to 83.7 in May, its highest level since 2007, from 76.4 in the preceding month, outstripping expectations for a reading of 78.0.

A separate report by the Conference Board showed that its index of leading economic indicators rose 0.6% in April, more than double the 0.2% increase expected by economists.

The robust data bolstered expectations that the Federal Reserve could begin to scale back its USD85 billion a month asset purchase program this year.

Meanwhile, in its annual budget release, the New Zealand government projected a small budget surplus of NZD75 million in 2015, up from a previously forecast NZD66 million, as rebuilding earthquake-devastated Christchurch city bolsters economic growth and tax revenue.

In the week ahead, traders will be focusing on Wednesday’s Federal Reserve minutes, as well as testimony on the economic outlook and monetary policy by Fed Chairman Ben Bernanke.

Markets will also be looking ahead to trade data out of New Zealand later in the week.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events for the day.

Tuesday, May 21

New Zealand is to produce official data on inflation expectations.

Wednesday, May 22

The U.S. is to release data on existing home sales, a leading indicator of economic health, while the Fed is to publish the minutes of its most recent policy-setting meeting.

Meanwhile, Fed Chairman Ben Bernanke is to testify on the economy and monetary policy in Washington.

Thursday, May 23

The U.S. is to release the weekly government report on initial jobless claims and official data on new home sales, a leading indicator of economic health.

Friday, May 24

New Zealand is to publish official data on the trade balance.

The U.S. is to round up the week with government data on durable goods orders, a leading indicator of production.