AUD/NZD Bullishness to Prevail Amid Forecast of Falling New Zealand Trade Balance

AUD/NZD – Technical Analysis for Forex Trading & CFDs.

Australia – CB Leading Index

Today, at GMT 2:30 p.m., the Conference Board Inc will release the month-over-month leading index for Australia, which measures the changes in the level of a composite index based seven other major fundamental indicators.

Since the CB leading index aggregates some of the other indicator data, Forex traders consider this to be an important representation of the overall Australian economy. However, since most of these data are previously released, the CB leading index tends to have a minimized immediate market impact.

Last month, the CB leading index increased by 0.1% and if the positive trend continues this month, it would like have a bullish influence on the Australian Dollar against other major currencies.

New Zealand – Trade Balance

On Wednesday, at GMT 10:45 p.m., the Statistics New Zealand released the national trade balance figure, which measures the difference of the value between net import and net export of the country during the previous month.

Since the export of a country is directly correlated to the demand for its currency, a positive trade balance figure indicates that foreigners had to buy more local (NZD) currency in exchange of their domestic currency. Hence, economists and Forex investors consider the trade balance to be an important indicator of the health of the New Zealand’s economy.

Last month, the trade balance figure of New Zealand came out at $242 million, and this month the forecast is set a much lower figure, at -$200 million.

AUD/NZD Forecast

Since the end of June, the AUD/NZD has remained bullish and formed a well-respected uptrend line. However, after reaching close to the 23.6% Fibonacci retracement level of the last major upswing, it found a strong resistance near the 1.0850 level. Last week, the AUD/NZD penetrated above the 1.0850 level, but so far it has failed to close above it.

As the Australian CB leading index is has been increasing over the last few months, but the New Zealand trade balance is expected to decrease by $200 million, we believe it would set a bullish fundamental outlook for the AUD/NZD this week. Therefore, if the AUD/NZD closes above the 1.0850 level, it would likely attract additional bullish momentum in the market.

Hence, Australian Forex traders should look out for trading opportunities above this major resistance level around 1.0850.

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

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