Source: PaxForex Premium Analytics Portal, Fundamental Insight
New Zealand Retail Sales for the fourth quarter dropped by 1.9% quarterly, and New Zealand Core Retail Sales decreased by 1.7% quarterly. Economists predicted a contraction of 0.2% and 0.1%. Forex traders can compare this to New Zealand Retail Sales for the third quarter, which fell by 0.8% quarterly, and New Zealand Core Retail Sales, which rose 0.4% quarterly. New Zealand Retail Sales for the fourth quarter plunged 4.1% annualized. Forex traders can compare this to New Zealand Retail Sales for the third quarter, which decreased by 3.4% annualized.
The Chinese House Price Index for January decreased by 0.7% annualized. Forex traders can compare this to the Chinese House Price Index for December, which contracted 0.4% annualized.
The Singapore CPI for January decreased by 0.7% monthly and increased by 2.9% annualized. Economists predicted a contraction of 0.2% and an expansion of 3.8%. Forex traders can compare this to the Singapore CPI for December, which rose 0.4% monthly and 3.7% annualized. The Singapore Core CPI for January expanded by 3.1% annualized. Economists predicted an increase of 3.6%. Forex traders can compare this to the Singapore Core CPI for December, which rose 3.3% annualized.
Forex traders will finish this trading week with a quiet economic calendar. The German IFO report for February is the last market-moving item, where economists predict a minor increase across the three subcomponents. It could result in choppy trading with a volume spike towards the end of the official US trading session, as most traders could close positions to avoid weekend events that could result in price action swings to start the new trading session on Monday.
The forecast for the NZD/SGD turned cautiously bearish after this currency pair rallied over the past two weeks, which took price action into its horizontal resistance area. Following a bullish crossover, the Tenkan-sen and the Kijun-sen have flatlined, confirming the lack of short-term upside momentum. The Ichimoku Kinko Hyo Cloud entered a sideways trend after a bearish crossover, with the Senkou Span A and the Senkou Span B flat. Traders should also monitor the CCI in extreme overbought territory, where a negative divergence has formed. A breakdown below 100 could drop this technical indicator below zero, leading to a sell-off with plenty of downside potential. Can bears regain control over the NZD/SGD and pressure this currency pair into its horizontal support area, erasing the gains? 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 0.8315 to 0.8370 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8335
- Take Profit Zone: 0.8135 – 0.8180
- Stop Loss Level: 0.8410
Should price action for the NZD/SGD breakout above 0.8370, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.8410
- Take Profit Zone: 0.8475 – 0.8515
- Stop Loss Level: 0.8370
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