Source: PaxForex Premium Analytics Portal, Fundamental Insight
New Zealand Retail Card Spending for June increased 0.1% monthly and 1.9% annualized. Forex traders can compare this to New Zealand Retail Card Spending for May, which rose 1.8% monthly and 0.7% annualized.
Japanese Machine Orders for May decreased 5.6% monthly and increased 7.4% annualized. Economists predicted a drop of 5.5% and a rise of 5.8%. Forex traders can compare this to Japanese Machine Orders for April, which surged 10.8% monthly and 19.0% annualized.
Japanese M3 Money Supply for June came in at ¥2,062.3T. Forex traders can compare this to the Japanese M3 Money Supply for May, reported at ¥2,056.2T.
Traders will get a light economic calendar to start the new trading week, with no market-moving releases during the European or US sessions. French and US bond auctions will offer more insight about borrowing costs, with the US 3-year auction of interest, as yields approach 3.00%. French short-term debt could print negative yields until the ECB raises interest rates this month, but the 6-month BTF auction could print a minor positive yield. The ECB could surprise with a more hawkish stance amid the collapse of the Euro, which flirts with parity against the US. A mixed Asian trading session across sectors could extend into the European and US sessions, as a slowing economy, inflation, and rising borrowing costs are dominant themes that could end last week’s bull trap. The cryptocurrency market is also approaching the end of its bear market rally, with contagion risks spreading from bankruptcies like Voyager Digital and lawsuits claiming Ponzi schemes, like crypto lender Celsius Network.
The forecast for the NZD/JPY remains bearish, with this currency pair approaching resistance following two lower highs, which is likely to result in a third one. Adding to downside pressure is the descending Tenkan-sen with a flat Kijun-sen, confirming the lack of bullishness. The Ichimoku Kinko Hyo Cloud acts as support, but the Senkou Span B remains flat while the Senkou Span A advances, suggesting more volatility ahead. Traders should monitor the CCI after it has completed a breakout from extreme oversold territory. It is likely to pierce above zero but notch a lower high, from where more downside could follow, giving traders a final sell signal. Can bears hold on to control over the NZD/JPY and force it 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/JPY remain inside the or breakdown below the 83.850 to 85.200 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 84.550
- Take Profit Zone: 79.450 – 80.450
- Stop Loss Level: 85.700
Should price action for the NZD/JPY breakout above 85.200, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 85.700
- Take Profit Zone: 86.800 – 87.300
- Stop Loss Level: 85.200
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
