Source: PaxForex Premium Analytics Portal, Fundamental Insight
Australian Westpac Consumer Confidence for November increased by 2.5% monthly to 107.7. Forex traders can compare this to Australian Westpac Consumer Confidence for October, which increased by 11.9% monthly to 105.0. The Reserve Bank of New Zealand kept interest rates unchanged at 0.25%. Economists predicted no change in interest rates. Forex traders can compare this to the Reserve Bank of New Zealand's previous interest rate announcement, where rates were left unchanged at 0.25%.
After the Reserve Bank of Australia cut interest rates to 0.10%, the Reserve Bank of New Zealand kept them unchanged. Despite the interest rate differential, Forex traders are unlikely to use the Australian Dollar and the New Zealand Dollar as a carry trade, as other currencies are better positioned for that. Both economies depend on China, which continues to grow despite the Covid-19 pandemic, where Australia enjoys a more balance export portfolio than New Zealand, while it has soured relations with China.
The forecast for the AUD/NZD turned bullish after this currency pair reached support. The outlook for the New Zealand economy remains weaker than that for the Australian one, creating a long-term positive catalyst. With the Tenkan-sen and the Kijun-sen trending sideways, price action can enter a reversal into its downside sloping Ichimoku Kinko Hyo Cloud. Will bulls be able to rally the AUD/NZD into its horizontal resistance area just above the cloud? 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 breakout above the 1.0565 to 1.0630 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.0600
- Take Profit Zone: 1.0850 – 1.0895
- Stop Loss Level: 1.0550
Should price action for the AUD/NZD breakdown below 1.0565 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.0550
- Take Profit Zone: 1.0400 – 1.0450
- Stop Loss Level: 1.0565
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