Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Trade Balance for April was reported at NZ$388M monthly and at NZ$730M 12-month year-to-date. Forex traders can compare this to the New Zealand Trade Balance for March, reported at NZ$39M monthly and NZ$1,700M 12-month year-to-date. Exports for April were reported at NZ$5.37B and Imports at NZ$4.98B. Forex traders can compare this to Exports for March, reported at NZ$5.69B, and to Imports, reported at NZ$5.66B. The Reserve Bank of New Zealand kept interest rates unchanged at 0.25%. Economists predicted no change in interest rates. Forex traders can compare this to the Reserve Bank of New Zealand's previous interest rate decision, where rates were left unchanged at 0.25%.
The Japanese Corporate Service Price Index for April increased by 1.0% annualized. Forex traders can compare this to the Japanese Corporate Service Price Index for March, which increased by 0.7% annualized. The Final Japanese Leading Index for March was reported at 102.5, and the Final Japanese Coincident Index was reported at 93.0. Forex traders can compare this to the Japanese Leading Index for February, reported at 98.9, and to the Japanese Coincident Index, reported at 89.9.
The forecast for the NZD/JPY remains bearish despite the most recent price spike following the announcement by the Reserve Bank of New Zealand that it will keep monetary policy loose. It maintains bearish pressures on the New Zealand Dollar amid a slowly intensifying global risk-off sentiment. The Ichimoku Kinko Hyo Cloud shows signs of a top, but volatility may increase as the Kijun-sen and Tenkan-sen drift higher. After the CCI reached extreme overbought territory, a negative divergence started to form, suggesting a reversal in this currency pair may follow. Can bear regain control of the NZD/JPY 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/JPY remain inside the or breakdown below the 79.300 to 78.000 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 78.500
- Take Profit Zone: 77.150 – 77.500
- Stop Loss Level: 79.300
Should price action for the NZD/JPY breakout above 79.000, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 79.300
- Take Profit Zone: 80.000 – 80.600
- Stop Loss Level: 79.000
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