Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Trade Balance for December came in at -NZ$323M monthly and at -NZ$13,570M annualized. Forex traders can compare this to the New Zealand Trade Balance for November, reported at -NZ$1,250M monthly and -NZ$13,900M annualized. Exports for December came in at NZ$5.94B and Imports at NZ$6.26B. Forex traders can compare this to Exports for November, reported at NZ$5.95B, and Imports, reported at NZ$7.20B.
Singapore Export Prices for December decreased by 2.1% annualized, and Singapore Import Prices increased by 0.7% annualized. Forex traders can compare this to Singapore Export Prices for November, which dropped 3.7% annualized, and Singapore Import Prices, which decreased 1.1% annualized. The Singapore PPI for December contracted by 1.1% annualized. Forex traders can compare this to the Singapore PPI for November, which dropped 2.9% annualized.
The new trading week starts slow on the economic front but heavy on geopolitical tensions. Three US service members died, and many were injured after a drone strike carried out by Iran-backed militants in Iraq attacked a Jordanian military outpost close to the Syrian border. It represents the latest escalation in the Middle East, a few days after Houthi militants attacked an oil tanker in the Red Sea. Commodity prices will feel upside pressure, led by oil, and a higher US Dollar can lift soft commodity prices. It can add inflationary pressures but benefit New Zealand's exports of soft commodities.
Many traders bet on aggressive interest rate cuts by the US Federal Reserve, but intensifying upside pressures on inflation could keep the central bank sidelined for most of 2024. Despite overall optimism concerning a recession, stagflation risks continue to rise in the background, and traders betting on the Fed are likely to face disappointment and further policy missteps.
The forecast for the NZD/SGD is cautiously bullish after this currency pair corrected into its horizontal support area. The upward-shifting Ichimoku Kinko Hyo Cloud provides long-term bullishness, but the descending Senkou Span A adds short-term volatility with the Senkou Span B flat. The Kijun-sen trends sideways following a bearish crossover, but the Tenkan-sen continues to move lower, adding to short-term volatility as bulls and bears struggle for control. Traders should also monitor the CCI after its breakout from extreme oversold territory. This technical indicator has plenty of upside potential, and a sustained move above zero could trigger a rally, reversing the previous sell-off. Can bulls maintain control over the NZD/SGD and pressure price action into its horizontal resistance 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 breakout above 0.8145 to 0.8215 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.8180
- Take Profit Zone: 0.8305 – 0.8345
- Stop Loss Level: 0.8110
Should price action for the NZD/SGD breakdown below 0.8145, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.8110
- Take Profit Zone: 0.8050 – 0.8085
- Stop Loss Level: 0.8145
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