The New Zealand services sector expanded strongly in January, easing the negative impact on tourism and commodity exports from Covid-19. December’s data was revised higher, adding significance to the upbeat report. External migration contracted marginally and the NZD/JPY remained inside of its horizontal support area. How will this currency pair trade, moving forward? Today’s fundamental analysis will take a look at price action in both directions.
Japan released its preliminary fourth-quarter GDP during the Asian morning trading session. It came in significantly worse than what economists predicted. A sharp slowdown in business spending led the GDP contraction, followed by a slump in consumer spending. Third-quarter downward revisions added to the bleak report. The Japanese Yen enjoyed safe-haven demand related to Covid-19, but where will price action move from here? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for New Zealand Dollar trades:
- New Zealand Performance of Services Index: The New Zealand Performance of Services Index for January was reported at 57.1. Forex traders can compare this to the New Zealand Performance of Services Index for December, which was reported at 52.1.
- New Zealand Migration: Permanent/Long-Term Migration for December was reported at 3,930. Forex traders can compare this to Permanent/Long-Term Migration for November, which was reported at 2,490. External Migration & Visitors decreased by -0.20% monthly. Forex traders can compare this to External Migration & Visitors for November, which decreased by -3.50% monthly.
Here are the key factors to keep in mind today for Japanese Yen trades:
- Japanese GDP: The Preliminary Japanese GDP for the fourth quarter decreased by 1.6% quarterly and by 6.3% annualized. Economists predicted a decrease of 1.0% quarterly and 3.8% annualized. Forex traders can compare this to the Japanese GDP for the third quarter, which increased by 0.1% quarterly and by 0.5% annualized. The Preliminary Nominal GDP for the fourth quarter decreased by 1.2% quarterly. Economists predicted a decrease of 0.6% quarterly. Forex traders can compare this to the Nominal GDP for the third quarter, which increased by 0.5% quarterly. The Preliminary GDP Deflator for the fourth quarter increased by 1.3% annualized. Economists predicted an increase of 1.1% annualized. Forex traders can compare this to the Preliminary GDP Deflator for the third quarter, which increased by 0.6% annualized. Preliminary Private Consumption for the fourth quarter decreased by 2.9% quarterly and Preliminary Business Spending decreased by 3.7% quarterly. Economists predicted a decrease of 2.0% and 1.6%. Forex traders can compare this to Private Consumption for the third quarter, which increased by 0.5% quarterly and to Business Spending for the third quarter, which increased by 0.5% quarterly.
- Japanese Condominium Sales: Japanese Condominium Sales for January decreased by 34.5% annualized. Forex traders can compare this to Japanese Condominium Sales for December, which decreased by 14.3% annualized.
- Japanese Industrial Production and Capacity Utilization: Final Japanese Industrial Production for December increased by 1.4% monthly and decreased by 0.4% annualized. Forex traders can compare this to previous Japanese Industrial Production for December, which increased by 1.3% monthly, and which decreased by 3.0% annualized. Capacity Utilization for December decreased by 0.4% monthly. Forex traders can compare this to Capacity Utilization for November, which decreased by 0.3% monthly.
Should price action for the NZDJPY remain inside the or breakdown below the 70.400 to 70.900 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 70.700
- Take Profit Zone: 68.250 – 68.850
- Stop Loss Level: 71.150
Should price action for the NZDJPY breakout above 70.900 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 71.150
- Take Profit Zone: 71.850 – 72.100
- Stop Loss Level: 70.900
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio. Do you trade with one of the most trusted MT4 forex brokers? Sign-up with PaxForex today and join one of the fastest-growing trading communities in the forex market.
We are one of the fastest growing Forex Brokers in the Market. Trade with PaxForex to get the full Forex Trading experience which is based on...
- The Reliability on all Assets in the Market
- Trusted Worldwide for over a Decade
- Live Multi-Lingual Online Support 24/5
