Inflationary pressures rose in the second-quarter in New Zealand as oil prices were pressured to the upside. New Zealand is heavily exposed to commodity exports which are under pressure as the global economy cools, but the tensions between the US and Iran have supported oil prices. The NZDUSD has rallied into strong resistance and while the trend is expected to continue, a short-term reversal on the back of profit taking is anticipated. Subscribe to the PaxForex Daily Fundamental Analysis where you will earn more pips per trade!
Here are the key factors to keep in mind today for New Zealand Dollar trades:
- New Zealand CPI: The New Zealand CPI for the second-quarter increased by 0.6% quarterly and by 1.7% annualized. Economists predicted an increase of 0.6% and of 1.7%. Forex traders can compare this to the New Zealand CPI for the first-quarter which increased by 0.1% quarterly and by 1.5% annualized.
- New Zealand Non Resident Bond Holdings: New Zealand Non Resident Bond Holdings for June were reported at 50.3%. Forex traders can compare this to New Zealand Non Resident Bond Holdings for May which were reported at 51.3%.
The US Dollar is likely to see a spike in trading volume today as a series of key economic reports is scheduled for release. Retail sales data as well as industrial and manufacturing production data will be front and center as forex traders will assess how much of an impact the trade war with China is having on the economy. Will bears get the data to ignite a fresh wave of selling in the US Dollar? Today’s fundamental analysis will assert the potential impact of economic data on price action in the NZDUSD.
Here are the key factors to keep in mind today for US Dollar trades:
- US Import and Export Price Index: The US Import Price Index for June is predicted to decrease by 0.7% monthly and by 2.1% annualized. Forex traders can compare this to the US Import Price Index for May which decreased by 0.3% monthly and by 1.5% annualized. The US Import Price Index excluding Petroleum for June is predicted to decrease by 0.2% monthly. Forex traders can compare this to the US Import Price Index excluding Petroleum for May which decreased by 0.3% monthly. The US Export Price Index for June is predicted to decrease by 0.3% monthly and by 1.4% annualized. Forex traders can compare this to the US Export Price Index for May which decreased by 0.2% monthly and by 0.7% annualized.
- US Advanced Retail Sales: US Advanced Retail Sales for June are predicted to increase by 0.2% monthly and Retail Sales Less Autos are predicted to increase by 0.1% monthly. Forex traders can compare this to US Advanced Retail Sales for May which increased by 0.5% monthly and to Retail Sales Less Autos which increased by 0.5% monthly. Retail Sales Less Autos and Gas for June are predicted to increase by 0.3% monthly and Retail Sales Control Group are predicted to increase by 0.3% monthly. Forex traders can compare this to Retail Sales Less Autos and Gas for May which increased by 0.5% monthly and to Retail Sales Control Group which increased by 0.4% monthly.
- US Industrial Production and Manufacturing Production: US Industrial Production for June is predicted to increase by 0.1% monthly and Manufacturing Production is predicted to increase by 0.3% monthly. Forex traders can compare this to US Industrial Production for May which increased by 0.4% monthly and to Manufacturing Production which increased by 0.2% monthly. Capacity Utilization for June is predicted at 78.1%. Forex traders can compare this to Capacity Utilization for May which was reported at 78.1%.
- US NAHB Housing Market Index: The US NAHB Housing Market Index for July is predicted at 64. Forex traders can compare this to the US NAHB Housing Market Index for June which was reported at 64.
- US Business Inventories: US Business Inventories for May are predicted to increase by 0.3% monthly. Forex traders can compare this to US Business Inventories for April which increased by 0.5% monthly.
- US TIC Data: US TIC Net Long-Term Transactions for May are predicted at $32.3B and US Total Net TIC Flows are predicted at $13.1B. Forex traders can compare this to US TIC Net Long-Term Transactions for April which were reported at $46.9B and to US Total Net TIC Flows which were reported at -$7.8B.
Should price action for the NZDUSD remain inside the or breakdown below the 0.6715 to 0.6775 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 0.6730
- Take Profit Zone: 0.6480 – 0.6520
- Stop Loss Level: 0.6835
Should price action for the NZDUSD breakout above 0.6775 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 0.6785
- Take Profit Zone: 0.6910 – 0.6935
- Stop Loss Level: 0.6730
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