The ongoing trade war between the US and China continues to show its ripple effects across the global supply chain and economy. New Zealand reported its trade balance during the Asian trading session, but it surprised to the upside. Exports as well as imports came in better than expected for May which boosted the New Zealand Dollar. This allowed the NZDUSD to extend its recovery after descending into a strong support area. How long can this recovery last? Today’s fundamental analysis will take a look at how price action in this currency pair will trade into the release of US economic data and beyond.

Here is the key factor to keep in mind today for New Zealand Dollar trades:

• New Zealand Trade Balance: The New Zealand Trade Balance for May was reported at NZ$264M monthly and at -NZ$5,492M 12-month year-to-date. Economists predicted a figure of NZ$250M and of -NZ$5,530M. Forex traders can compare this to the New Zealand Trade Balance for April which was reported at NZ$433M monthly and at -NZ$5,479M 12-month year-to-date. Exports for May were reported at NZ$5.81B and Imports were reported at NZ$5.54B. Economists predicted a figure of NZ$5.61B and of NZ$5.40B. Forex traders can compare this to Exports for April which were reported at NZ$5.55B and to Imports which were reported at NZ$5.11B.

US economic data will focus on housing data with three separate reports scheduled for release. The US housing sector, at the core of the last global financial crisis a decade ago, has been deteriorating sharply in a worrying sign for the US economy. The erosion of the wealth effect will ultimately have an impact on consumer confidence. How will today’s housing data impact the NZDUSD? Consumer confidence data will also be released, together with the regional Richmond Fed Manufacturing Index. Will it disappoint like yesterday’s Dallas Fed Manufacturing Activity Index? How will today’s US housing data impact forex trading strategies?

Here are the key factors to keep in mind today for US Dollar trades:

• US House Price Index: The US House Price Index for April is predicted to increase by 0.2% monthly. Forex traders can compare this to US House Price Index for March which increased by 0.1% monthly.
• US S&P/Case-Shiller Composite 20: The US S&P/Case-Shiller Composite 20 for April is predicted to increase by 0.10% monthly and by 2.50% annualized. Forex traders can compare this to the US S&P/Case-Shiller Composite 20 for March which increased by 0.09% monthly and by 2.68% annualized.
• US Richmond Fed Manufacturing Index: The US Richmond Fed Manufacturing Index for June is predicted at 2. Forex traders can compare this to the US Richmond Fed Manufacturing Index for May which was reported at 5.
• US New Home Sales: US New Home Sales for May are predicted to increase by 1.8% monthly to 685K new homes. Forex traders can compare this to US New Home Sales for April which decreased by 6.9% monthly to 673K new homes.
• US Consumer Confidence: US Consumer Confidence for June is predicted at 131.0. Forex traders can compare this to US Consumer Confidence for May which was reported at 134.1.

Should price action for the NZDUSD remain inside the or breakout above the 0.6610 to 0.6680 zone the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Long Position
• Entry Level: Long Position @ 0.6640
• Take Profit Zone: 0.6870 – 0.6935
• Stop Loss Level: 0.6585

Should price action for the NZDUSD breakdown below 0.6610 the following trade set-up is recommended:

• Timeframe: D1
• Recommendation: Short Position
• Entry Level: Short Position @ 0.6585
• Take Profit Zone: 0.6425 – 0.6465
• Stop Loss Level: 0.6615

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