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March 23 – International Energy Agency Executive Director Fatih Birol said on Monday that more than 40 energy facilities in nine Middle Eastern countries have suffered “serious or very serious” damage due to the Middle East wars, which could lead to continued disruptions to global supply chains after the conflict ends. Birol stated that the damage means oil fields, refineries, and pipelines will need some time to return to operation.On March 23, Capital Economics analyst Gareth Lesser noted in a report that Asias reliance on imported energy makes it more vulnerable to prolonged periods of high oil prices compared to other regions. Historically, approximately 80% to 90% of energy traffic through the Strait of Hormuz has been destined for Asian markets. Asia has already experienced rising crude oil and refined product prices; since the start of the war, the Singapore diesel benchmark price has increased by about 140%. Sri Lanka, the Philippines, and Pakistan will be hit hardest because they heavily rely on energy imports from the Middle East and have limited fiscal space to mitigate the impact.March 23 - Two weekend polls showed that a majority of Japanese people oppose sending warships to the Middle East in response to the potential conflict with Iran. This comes after the United States has been pressuring its allies to help secure the Strait of Hormuz. A Yomiuri Shimbun poll showed 67% of respondents opposed sending Japanese Self-Defense Forces to the region, while an Annan News Agency poll showed 52%. The polls also indicated that Prime Minister Sanae Takaichis cabinet maintains high approval ratings at 71% and 65.2% respectively, with most people positively evaluating her meeting with Trump on March 19. Takaichi avoided a direct confrontation with Trump over Japans support for securing the strait, but Trump continues to pressure Japan to fulfill its responsibilities.Australian Prime Minister Albanese: Strengthening energy security cooperation with Singapore and supporting the flow of diesel and liquefied natural gas between the two countries.Nomura Securities: Lowered its target price for Tencent Holdings (00700.HK) from HK$775 to HK$727.

Analysis of the NZD/USD Price indicates a continuation of gains towards 0.65

Daniel Rogers

Jan 18, 2023 15:02

 NZD:USD.png

 

The NZD/USD pair is oscillating within a narrow range near 0.6430 in the early Asian session. Despite the market's risk aversion, the New Zealand dollar has traded sideways after reclaiming the monthly high of 0.6437. In reaction to Tom Barkin's hawkish comments about the Richmond Federal Reserve (Fed) Bank, S&P500 futures are exhibiting greater losses, indicating investors' diminishing appetite for risk.

 

Following a V-shaped recovery, the US Dollar Index (DXY) has turned sideways at 102,000 and is expected to extend gains on a risk aversion theme. In addition, higher 10-year US Treasury yields would certainly provide safe-haven investments a new lease of life.

 

After one hour of consolidation, the NZD/USD pair has broken out of the Bullish Pennant chart pattern, indicating that the rising trend will continue. Participants typically initiate long positions during the consolidation period of a chart pattern, preferring to enter an auction once a bullish bias has been established.

 

Adding to the upward filters, the 20-period and 50-period Exponential Moving Averages (EMAs) have resumed their upward trend at 0.6415 and 0.6401, respectively.

 

Meanwhile, the Relative Strength Index (14) continues to struggle to enter the positive zone between 60.00 and 80.00. The occurrence of a similar event will produce bullish momentum.

 

For greater gains, the Kiwi asset must beat Tuesday's high of 0.6439, which will rocket it to December 15's high of 0.6470, then December 13's high of 0.6514.

 

Alternately, a breach below Monday's low of 0.6361 will weaken the New Zealand Dollar and push the Kiwi asset towards January 12's low of 0.6304. A breach below this level will expose the asset to more losses approaching the low of 0.6263 on December 28.

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