Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Trade Balance for February came in at -NZ$385M monthly and at -NZ$8,370M annualized. Forex traders can compare this to the New Zealand Trade Balance for January, reported at -NZ$1,126M monthly and -NZ$7,780M annualized. Exports for February were NZ$5.49B and Imports NZ$5.88B. Forex traders can compare this to Exports for January, reported at NZ$4.80B, and Imports, reported at NZ$5.92B.
New Zealand Credit Card Spending for February increased 1.0% annualized. Forex traders can compare this to New Zealand Credit Card Spending for January, which rose 5.1% annualized.
The German PPI for February is predicted to rise 1.7% monthly and 26.2% annualized. Forex traders can compare this to the German PPI for January, which increases 2.2% monthly and 25.0% annualized.
Traders should monitor commodity prices and inflationary data carefully. Both remain under upside pressures. Central banks began to increase interest rates but are behind the curve. Financial markets may deal with a prolonged period of stagflationary pressures as the US exports inflation to other countries. Volatility is likely to increase as equity markets remain in the early stages of a bear market. Cross-asset portfolio adjustments are likely to follow, which will impact the Forex market as companies seek to hedge medium-term risk and asset fluctuations. The Euro can benefit in this environment, as it remains the only G7 currency with surpluses rather than deficits.
The forecast for the EUR/NZD turned bullish after this currency pair stabilized at psychological support, with the Ichimoku Kinko Hyo Cloud showing signs of fading bearish pressures. Adding to the bullish outlook is the Tenkan-sen, which started to move higher. The Kijun-sen is also suggesting a loss of bearish momentum. It slows its descent and approaches a flatline. After the CCI has completed a breakout above extreme oversold territory, traders should monitor price action for a retest of the -100 with a higher low, where more upside is likely. Can bulls increase momentum and force the EUR/NZD 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 1.5890 to 1.6110 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Short Position @ 1.6000
- Take Profit Zone: 1.6540 – 1.6670
- Stop Loss Level: 1.5830
Should price action for the EUR/NZD breakdown below 1.5890, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Long Position @ 1.5830
- Take Profit Zone: 1.5620 – 1.5735
- Stop Loss Level: 1.5890
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