Source: PaxForex Premium Analytics Portal, Fundamental Insight
New Zealand Permanent/Long-Term Migration for June came in at -896. Forex traders can compare this to Permanent/Long-Term Migration for May, reported at -853. External Migration & Visitors for June increased 83.5% monthly. Forex traders can compare this to External Migration & Visitors for May, which rose 26.3% monthly.
The final Singapore GDP for the second quarter decreased 0.2% quarterly and increased 4.4% annualized. Economists predicted a flat reading of 0.0% and a rise of 4.8%. Forex traders can compare this to the Singapore GDP for the first quarter, which rose 0.8% quarterly and 3.8% annualized.
Yesterday’s US inflation data sparked a risk-on rally across financial markets. CPI data for July came in weaker than forecast, but it remains high by historic standards. The annualized data showed a rise of 8.5%, below the expected 8.7%, and down from the 9.1% in June. One data point does not warrant a trend, and given the interest rate increases by global central banks, a slowdown in inflation is normal. Putting yesterday’s euphoria into perspective, the accepted inflation rate or inflation target by many central banks in developed countries is 2.0%. Therefore, interest rates will continue to rise while companies warn about their 2022 full-year outlook.
After first quarter GDP reports were revised downward, it appears that second-quarter economic performance was worse than the initial print. This morning’s final Singapore GDP data served as a reminder to markets. Markets will focus on third-quarter economic reports, which have been mixed so far. A light trading day ahead will shift the focus to data out of the US, where traders get initial jobless claims, likely to tick higher, and PPI data. Given the absence of a catalyst, profit-taking in currency pairs that rallied previously, like the NZD/SGD, could dominate the session.
The forecast for the NZD/SGD turned bearish after this currency pair advanced into its flat Ichimoku Kinko Hyo Cloud, which shows a bearish bias. Confirming the lack of short-tern upside pressures are the flat Kijun-sen and the Tenkan-sen, but traders should expect an increase in volatility as bulls and bears will fight for control over the next move. The CCI spiked from extreme oversold territory deep into extreme overbought conditions. A breakdown below 100 could trigger the next sell-off. Can bears regain control over the NZD/SGD and force price action 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/SGD remain inside the or breakdown below the 0.8700 to 0.8800 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8750
- Take Profit Zone: 0.8235 – 0.8355
- Stop Loss Level: 0.8840
Should price action for the NZD/SGD breakout above 0.8800, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.8840
- Take Profit Zone: 0.8930 – 0.8990
- Stop Loss Level: 0.8800
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