Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Trade Balance for January came in at -NZ$1,954M monthly and at -NZ$15,480M annualized. Economists predicted a figure of -NZ$1,405M and -NZ$14,887M. Forex traders can compare this to the New Zealand Trade Balance for December, reported at -NZ$636M monthly and -NZ$14,630M annualized. Exports for January came in at NZ$5.47B, and Imports at NZ$7.42B. Forex traders can compare this to Exports for December, reported at NZ$6.52B, and Imports at NZ$7.16B.
New Zealand Credit Card Spending for January surged 17.9% annualized. Forex traders can compare this to New Zealand Credit Card Spending for December, which sky-rocketed 12.4% annualized.
The Reserve Bank of New Zealand raised interest rates by 50 basis points to 4.75%. Economists predicted a 50 basis point interest rate hike. Forex traders can compare this to the Reserve Bank of New Zealand’s previous interest rate announcement, where the RBNZ hiked rates by 75 basis points to 4.25%. It marks the tenth consecutive tightening in monetary policy to combat sticky inflation at a time the economy decelerates, and consumers increase their debt.
The Australian Westpac Leading Index for January decreased by 0.1% monthly. Forex traders can compare this to the Australian Westpac Leading Index for December, which contracted by 0.2%.
Australian Construction Work Done for the fourth quarter decreased by 0.4% quarterly. Economists predicted an increase of 1.5%. Forex traders can compare this to Australian Construction Work Done for the third quarter, which rose by 2.2% quarterly.
The Australian Wage Price Index for the fourth quarter increased by 0.8% quarterly and 3.3% annualized. Economists predicted a rise of 1.0% and 3.5% annualized. Forex traders can compare this to the Australian Wage Price Index for the third quarter, which rose by 1.0% quarterly and 3.1% annualized.
The forecast for the AUD/NZD remains bearish after this currency pair lost upside momentum following a 500+ pips rally. Confirming the lack of short-term bullish momentum are the flat Kijun-sen and the Tenkan-sen. The Ichimoku Kinko Hyo Cloud has also flatlined, and the next move could see a narrowing which can indicate a correction. Traders should also pay attention to the CCI following its breakdown from extreme overbought territory. Amove below zero could provide bears with the necessary trigger to push this currency pair into a correction. Can bears regain control over the AUD/NZD and force price action 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 1.0915 to 1.1000 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.0950
- Take Profit Zone: 1.0705 – 1.0755
- Stop Loss Level: 1.1045
Should price action for the AUD/NZD breakout above 1.1000, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.1045
- Take Profit Zone: 1.1115– 1.1175
- Stop Loss Level: 1.1000
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