Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Trade Balance for March came in at -NZ$392M monthly and at -NZ$9,110M annualized. Forex traders can compare this to the New Zealand Trade Balance for February, reported at -NZ$691M monthly and -NZ$8,680M annualized. Exports for March came in at NZ$6.67B and Imports at NZ$7.06B. Forex traders can compare this to Exports for February, reported at NZ$5.22B, and Imports, reported at NZ$5.91B.
The New Zealand ANZ Activity Outlook for April increased by 8.0%, and ANZ Business Confidence came in at -42.0. Forex traders can compare this to the New Zealand ANZ Activity Outlook for March, which rose 3.3%, and ANZ Business Confidence reported at -41.9.
The Australian Import Price Index for the first quarter increased 5.1% quarterly, and the Australian Export Price Index surged 18.0% quarterly. Forex traders can compare this to the Australian Import Price Index for the fourth quarter, which expanded 5.8% quarterly, and the Australian Export Price Index, which increased 3.5% quarterly.
First-quarter inflation data continues to surprise markets to the upside, but many traders look forward to second-quarter figures and expect moderation from multi-decade peaks. Inflationary pressures will likely ease over the coming months, but they are likely to remain high for the next few quarters. There are no signs that central banks can contain inflation this year. Australia reported a surge in export prices, mostly due to high commodity costs. The current global economic outlook remains mixed at best. Despite the size of the Australian economy versus New Zealand, the short-term outlook for the AUD/NZD is moderately bearish s price action struggles with resistance, and fundamental factors favor a short-to-medium-term correction into support levels.
The forecast for the AUD/NZD turned bearish after its horizontal resistance area rejected this currency pair. Price action is currently attempting a second breakout attempt, but fundamental factors could result in a second rejection. The Tenkan-sen flatlined, but the Kijun-sen and the Ichimoku Kinko Hyo Cloud advance, pointing toward a volatility increase. Traders should monitor the CCI after bouncing off extreme oversold conditions into positive territory. A reversal below zero can lead to a renewed sell-off with price action at resistance. Can bears overcome the bullish attack and force the AUD/NZD into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the AUD/NZD remain inside the or breakdown below the 1.0890 to 1.0945 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.0925
- Take Profit Zone: 1.0680 – 1.0720
- Stop Loss Level: 1.1000
Should price action for the AUD/NZD breakout above 1.0945, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.0000
- Take Profit Zone: 1.1075– 1.1120
- Stop Loss Level: 1.0945
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