Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Trade Balance for July came in at -NZ$1,107M monthly and at -NZ$15,810M annualized. Forex traders can compare this to the New Zealand Trade Balance for June, reported at -NZ$111M monthly and -NZ$16,110M annualized. Exports for July came in at NZ$5.45B and Imports at NZ$6.56B. Forex traders can compare this to Exports for June, reported at NZ$6.18B, and Imports at NZ$6.29B.
New Zealand Credit Card Spending for July rose 3.6% annualized. Economists predicted a rise of 14.3%. Forex traders can compare this to New Zealand Credit Card Spending for June, which increased 5.1% annualized.
The Chinese 1-Year Loan Prime Rate for August was reported at 3.45%, and the Chinese 5-Year Loan Prime Rate at 4.20%. Economists predicted a figure of 3.40% and 4.05%. Forex traders can compare this to the previous Chinese 1-Year Loan Prime Rate for July, reported at 3.55%, and the Chinese 5-Year Loan Prime Rate reported at 4.20%. Markets expected the recent bankruptcy filing in the Chinese real estate sector and ongoing woes among dozens of developers to result in an interest rate cut in the 5-Year Loan Prime Rate, but the PBOC held steady with its current monetary policy. China faced a significant slowdown in economic activity, which will send ripple effects across the global economy. Traders should not dismiss the potential of a recession moving forward.
The German PPI for July dropped by 1.1% monthly and 6.0% annualized. Economists predicted a decrease of 0.2% and 5.1%. Forex traders can compare this to the German PPI for June, which contracted by 0.3% monthly and rose by 0.1% annualized.
The forecast for the EUR/NZD turned cautiously bearish after this currency pair advanced into a horizontal resistance area with a loss in bullish momentum. The Ichimoku Kinko Hyo Cloud drifts higher, but price action could retreat to challenge the Ichimoku Kinko Hyo Cloud and confirm its uptrend before pushing to fresh highs. Traders should expect a volatility rise as the Kijun-sen and the Tenkan-sen move higher as bearish pressures mount. The CCI has formed a negative divergence in extreme overbought territory, suggesting a potential trend reversal, and completed a breakdown below 100. This technical indicator has plenty of downside potential and could drag this currency pair into a correction. Can bears overpower bulls and force the EUR/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 EUR/NZD remain inside the or breakdown below the 1.8360 to 1.8410 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.8385
- Take Profit Zone: 1.7955 – 1.8065
- Stop Loss Level: 1.8480
Should price action for the EUR/NZD breakout above 1.8410, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @1.8480
- Take Profit Zone: 1.8560 – 1.8610
- Stop Loss Level: 1.8410
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