The New Zealand business manufacturing sector dropped below 50.0, indicating a contraction in the sector. With this morning’s attention on Chinese data, the NZDUSD was able to advance and is now trading above its horizontal support area. Industrial production out of China surprised to the upside for a second consecutive month, fixed asset investment was solid, and retail sales held up. Can US data add to the rally in this currency pair, or will it force a reversal? Today’s fundamental analysis will take a look at price action in both directions.
Forex traders will finish this trading week on US housing data as well as industrial and manufacturing production data. Consumer confidence data will also be released. The NZDUSD corrected into its horizontal support area, but bullish momentum is recovering. How will price action react following the release of US economic data? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Key Fundamental Factors for the NZDUSD
Here are the key factors to keep in mind today for New Zealand Dollar trades:
New Zealand Business Manufacturing PMI: The New Zealand Business Manufacturing PMI for December was reported at 49.3. Forex traders can compare this to the New Zealand Business Manufacturing PMI for November, which was reported at 51.4.
Chinese GDP: The Chinese GDP for the fourth-quarter increased by 1.5% quarterly and by 6.0% annualized. Economists predicted an increase of 1.4% quarterly and 6.0% annualized. Forex traders can compare this to the Chinese GDP for the third quarter, which increased by 1.5% quarterly and by 6.0% annualized.
Chinese Retail Sales: Chinese Retail Sales for December increased by 8.0% annualized. Economists predicted an increase of 7.9% annualized. Forex traders can compare this to Chinese Retail Sales for November, which increased by 8.0% annualized.
Chinese Industrial Production: Chinese Industrial Production for December increased by 6.9% annualized. Economists predicted an increase of 5.9% annualized. Forex traders can compare this to Chinese Industrial Production for November, which increased by 6.2% annualized.
Chinese Fixed Assets ex Rural: Chinese Fixed Assets ex Rural for December increased by 5.4% annualized. Economists predicted an increase of 5.2% annualized. Forex traders can compare this to Chinese Fixed Assets ex Rural for November, which increased by 5.2% annualized.
Chinese Property Investment: Chinese Property Investment for December increased by 9.9% annualized. Forex traders can compare this to Chinese Property Investment for November, which increased by 10.2% annualized.
Chinese Surveyed Jobless Rate: The Chinese Surveyed Jobless Rate for December was reported at 5.2%. Forex traders can compare this to the Chinese Surveyed Jobless Rate for November, which was reported at 5.1%.
Here are the key factors to keep in mind today for US Dollar trades:
US Housing Starts and Building Permits: US Housing Starts for December are predicted to increase by 1.1% monthly to 1,380K starts, and Building Permits are predicted to decrease by 1.5% monthly to 1,460K permits. Forex traders can compare this to US Housing Starts for November, which increased by 3.2% monthly to 1,365K starts and to Building Permits, which increased by 1.4% monthly to 1,482K permits.
US Industrial Production and Manufacturing Production: US Industrial Production for December is predicted to decrease by 0.1% monthly and Manufacturing Production is predicted to increase by 0.1% monthly. Forex traders can compare this to US Industrial Production for November, which increased by 1.1% monthly and to Manufacturing Production which increased by 1.1% monthly. Capacity Utilization for December is predicted at 77.1%. Forex traders can compare this to Capacity Utilization for November, which was reported at 77.3%.
US Michigan Consumer Sentiment: Preliminary US Michigan Consumer Sentiment for January is predicted at 99.3. Forex traders can compare this to US Michigan Consumer Confidence for December, which was reported at 99.3. Preliminary Current Conditions for January are expected at 115.0 and Preliminary Expectations are predicted at 89.0. Forex traders can compare this to Current Conditions for December, which were reported at 115.5 and to Expectations, which were reported at 88.9.
US JOLTS Job Openings: US JOLTS Job Openings for November a predicted at 7.265M. Forex traders can compare this to US JOLTS Job Openings for October, which were reported at 7.267M.
Should price action for the NZDUSD remain inside the or breakout above the 0.6600 to 0.6665 zone the following trade set-up is recommended:
Timeframe: D1
Recommendation: Long Position
Entry Level: Long Position @ 0.6640
Take Profit Zone: 0.6755 – 0.6800
Stop Loss Level: 0.6580
Should price action for the NZDUSD breakdown below 0.6600 the following trade set-up is recommended:
Timeframe: D1
Recommendation: Short Position
Entry Level: Short Position @ 0.6580
Take Profit Zone: 0.6500 – 0.6520
Stop Loss Level: 0.6600
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio. Is your forex investment in good hands? Find out why more and more forex traders trust PaxForex with their portfolios!
