Over the weekend, as the G7 summit began in France, the trade war between the US and China intensified. China retaliated to the planned US tariffs in kind, and US President Trump vowed to increase all existing tariffs by 5%. As the global economy continues to cool, New Zealand reported a bigger-than-expected trade deficit for July. This was due to the surge in imports while exports remains nearly unchanged from June. The New Zealand Dollar remained stable as export figured were a sigh of relive for forex traders and the NZDUSD rebounded inside a strong horizontal support area. Will price action attempt a breakout on the back of a short-covering rally? This morning’s fundamental analysis will take a look at the upside potential and evaluate any downside risk from current levels.

Forex traders will start the new trading week with three key US economic reports which will give further insight if US Fed Chief Powell’s remarks on the health of the US economy, made at last week’s Jackson Hole Symposium, were accurate. Preliminary durable goods orders will be in focus as economists anticipate a flat reading excluding transportation. Two regional reports, out of Chicago and Dallas, are also favored to show weak figures. Will this result in US Dollar weakness? As the global economy slows down further, Trump is further escalating his trade war. How will this influence the NZDUSD? Subscribe to the PaxForex Daily Fundamental Analysis and take the profitable side of this trade!