Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Trade Balance for December came in at -NZ$475M monthly and at -NZ$14,460M annualized. Forex traders can compare this to the New Zealand Trade Balance for November, reported at -NZ$2,180M monthly and -NZ$14,980M annualized. Exports for December came in at NZ$6.72B, and Imports at NZ$7.19B. Forex traders can compare this to Exports for November, reported at NZ$6.34B, and Imports at NZ$8.52B.
The Preliminary Spanish CPI for January is predicted to increase by 4.9% annualized, and the Spanish EU Harmonized CPI to rise by 4.7% annualized. Forex traders can compare this to the Spanish CPI for December, which rose 5.7% annualized, and to the Spanish EU Harmonized CPI, which expanded 5.5% annualized.
The Preliminary German GDP for the fourth quarter is predicted at 0.0% quarterly and to increase by 0.8% annualized. Forex traders can compare this to the German GDP for the third quarter, which rose 0.4% quarterly and 1.2% annualized.
Eurozone Economic Sentiment for January is predicted at 97.0. Forex traders can compare this to Eurozone Economic Sentiment for December, reported at 95.8. Eurozone Industrial Sentiment for January is predicted at -0.6, and Eurozone Services Sentiment at 7.9. Forex traders can compare this to Eurozone Industrial Sentiment for December, reported at -1.5, and Eurozone Services Sentiment at 6.3. Final Eurozone Consumer Confidence for January is predicted at -20.9. Forex traders can compare this to the previous Eurozone Consumer Confidence for January, reported at -20.9.
Markets will await this week’s US Federal Reserve interest rates decision and monetary policy statement, hoping to get a signal indicating that the central bank will pause its tightening cycle. A 25 basis point interest rate increase is likely, but more could follow amid a tight labor market and high core inflation. The reopening of the Chinese economy will add inflationary pressures, and the US Fed may have to hike beyond its current terminal rate expectations.
The forecast for the EUR/NZD turned cautiously bullish after this currency pair was rejected by the lower band of its horizontal resistance area before correction into its ascending Ichimoku Kinko Hyo Cloud. The bullish crossover, where the Senkou Span A moved above the Senkou Span B, adds to upside pressures, but short-term volatility could increase with the Kijun-sen and the Tenkan-sen flat. Traders should monitor the CCI after it recorded a higher low in extreme oversold territory followed by a breakout. A move above zero could trigger the next leg higher, as this technical indicator has plenty of upside potential. Can bulls defeat bearish attempts on this currency pair and regain control over the EUR/NZD to push price action into its horizontal resistance 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 breakout above the 1.6680 to 1.6775 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Short Position @ 1.6745
- Take Profit Zone: 1.7040 – 1.7140
- Stop Loss Level: 1.6610
Should price action for the EUR/NZD breakdown below 1.6680, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @1.6610
- Take Profit Zone: 1.6350 – 1.6430
- Stop Loss Level: 1.6680
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