Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Trade Balance for October came in at -NZ$2,129M monthly and at -NZ$12,880M annualized. Forex traders can compare this to the New Zealand Trade Balance for September, reported at -NZ$1,696M monthly and -NZ$12,030M annualized. Exports for October came in at NZ$6.14B, and Imports at NZ$8.27B. Forex traders can compare this to Exports for September, reported at NZ$5.94B, and Imports at NZ$7.63B.
Canadian Retail Sales for September are predicted to contract by 0.5% monthly, and Canadian Core Retail Sales by 0.6% monthly. Forex traders can compare this to Canadian Retail Sales for August, which rose 0.7% monthly, and Canadian Core Retail Sales by 0.7% monthly.
Canadian Manufacturing Sales for October are predicted to increase by 0.2% monthly. Forex traders can compare this to Canadian Manufacturing Sales for September, which were flat at 0.0% monthly.
Canadian Wholesale Trade Sales for October are predicted to increase by 0.4% monthly. Forex traders can compare this to Canadian Wholesale Trade Sales for September, which rose 0.1% monthly.
The Canadian New Housing Price Index for October is predicted to increase by 0.2% monthly. Forex traders can compare this to the Canadian New Housing Price Index for September, which decreased by 0.1% monthly.
Financial markets began the holiday-shortened trading week in the red, as the cryptocurrency fallout from the FTX bankruptcy weighed on sentiment. Market participants will evaluate corporate outlooks, persistent inflation, and comments by central bankers about the need to hike interest rates further. While the US Federal Reserve led the monetary tightening cycle, the Bank of Canada implemented a 100 basis point increase, which paved the way for others to follow with a more aggressive approach. Bank of Canada Senior Deputy Governor Rogers will speak today, which could inject short-term volatility in the Canadian Dollar, which struggles with a decrease in oil prices. It should recover lost ground to the New Zealand Dollar, which shows economic cracks on multiple fronts.
The forecast for the NZD/CAD turned bearish after this currency pair reached its next horizontal resistance area. Confirming deflating short-term bullishness is the Tenkan-sen, which began to trend sideways, but the ascending Kijun-sen suggests bulls may attempt one final breakout attempt. The narrowing Ichimoku Kinko Hyo Cloud is vulnerable to a bearish crossover, adding to downside catalysts. Traders should monitor the CCI after it has completed a breakdown from extreme overbought territory with plenty of downside potential. Can bears regain control over the NZD/CAD and force a correction 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 0.8190 to 0.8250 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8220
- Take Profit Zone: 0.7935 – 0.8025
- Stop Loss Level: 0.8275
Should price action for the NZD/CAD breakout above 0.8250, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.8275
- Take Profit Zone: 0.8350 – 0.8420
- Stop Loss Level: 0.8250
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