Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand CPI for the fourth quarter rose 1.4% quarterly and 7.2% annualized. Economists predicted an increase of 1.3% and 7.1%. Forex traders can compare this to the New Zealand CPI for the third quarter, which expanded 2.2% quarterly and 7.2% annualized.
New Zealand Credit Card Spending for December surged 12.4% annualized. Forex traders can compare this to New Zealand Credit Card Spending for November, which sky-rocketed 16.2% annualized.
The Australian Westpac Leading Index for December decreased by 0.1% monthly. Forex traders can compare this to the Australian Westpac Leading Index for November, which contracted 0.1%.
The Australian CPI for the fourth quarter increased by 1.9% quarterly and 7.8% annualized. Economists predicted an expansion of 1.6% quarterly and 7.5% annualized. Forex traders can compare this to the Australian CPI for the third quarter, which rose 1.8% quarterly and 7.3% annualized. The RBA Trimmed Mean CPI for the fourth quarter increased by 1.7% quarterly and 6.9% annualized. Economists predicted a rise of 1.5% quarterly and 6.5% annualized. Forex traders can compare this to the RBA Trimmed Mean CPI for the third quarter, which expanded 1.8% quarterly and 6.1% annualized. The RBA Weighted Median CPI for the fourth quarter rose 1.6% quarterly and 5.8% annualized. Economists predicted an increase of 1.4% quarterly and 5.5% annualized. Forex traders can compare this to the RBA Weighted Median CPI for the third quarter, which expanded by 1.4% quarterly and 5.0% annualized.
Inflation data from Australia surprised to the upside, confirming fears that central banks have more work ahead of them in 2023. While inflation receded moderately over the past few months, it was due to a decrease in energy and an expected pullback from four-decade peaks. The first quarter of 2023 should see more interest rate increases in a slowing economy, setting the stage for a global recession. New Zealand inflation data also came in higher than expected.
The forecast for the AUD/NZD turned cautiously bearish after this currency pair pushed through its ascending Ichimoku Kinko Hyo Cloud. A potentially false bearish crossover may keep price action at bay as bulls and bears face off at a horizontal resistance area. The Tenkan-sen and the Kijun-sen drift moderately higher following a sharp one-day advance but remain in a choppy sideways drift. Traders should monitor the CCI after moving into extreme overbought territory, where a negative divergence may form. A breakdown below 100 could trigger a reversal of the current price spike. Can bears overpower bulls and regain control over the AUD/NZD to force it 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 1.0990 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.0945
- Take Profit Zone: 1.0630 – 1.0695
- Stop Loss Level: 1.1045
Should price action for the AUD/NZD breakout above 1.0990, 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: 1.0990
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