Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Business PMI for February was reported at 53.6. Forex traders can compare this to the New Zealand Business PMI for January, reported at 52.3. New Zealand Food Prices for February decreased 0.1% monthly. Forex traders can compare this to New Zealand Food Prices for January, which increased 2.7% monthly.
The Canadian Employment Report for February is predicted to show the addition of 160.0K jobs and an Unemployment Rate of 6.2%. Forex traders can compare this to the Canadian Employment Report for January, which showed the loss of 200.1K jobs and an Unemployment Rate of 6.5%.
The Canadian Capacity Utilization Rate for the fourth quarter is predicted at 82.2%. Forex traders can compare this to the Canadian Capacity Utilization Rate for the third quarter, reported at 81.4%.
New Zealand and Canada are commodity-exporting nations, and rising prices with inflation at four-decade highs will impact their currencies. New Zealand is a soft commodity exporter and hard commodity importer, while Canada is the opposite. It makes the NZD/CAD an interesting currency pair over the next few months, while it usually attracts less trading volume as a minor currency pair. Traders should monitor commodity prices, as they will impact the New Zealand Dollar and the Canadian Dollar.
The forecast for the NZD/CAD turned bearish for the medium-term as price action stalled at resistance, clearing the path for a potential reversal into its flat Ichimoku Kinko Hyo Cloud, which shows moderate signs of bullishness. Volatility is likely to increase as bulls and bears wrestle for control, with the Kijun-sen and the Tenkan-sen losing upside momentum. Following the breakdown in the CCI from extreme overbought territory, traders should monitor this indicator for a move below zero, which can add selling pressure. Will bears regain the upper hand and force the NZD/CAD 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 NZD/CAD remain inside the or breakdown below the 0.8710 to 0.8790 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8740
- Take Profit Zone: 0.8510 – 0.8555
- Stop Loss Level: 0.8825
Should price action for the NZD/CAD breakout above 0.8790, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.8835
- Take Profit Zone: 0.8900 – 0.8935
- Stop Loss Level: 0.8790
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