Jump in Trade Balance of New Zealand Likely to Solidify NZD/USD Uptrend

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

New Zealand – Trade Balance

On Monday, at GMT 9:45 p.m., the Statistics New Zealand released the national trade balance figure. It measures the difference of the value between net import and net export of the country during the previous month.

The export of a country is directly correlated to the demand for its currency. So, 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 traders 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 -$1,233 million. This month, the forecast was set a much better figure, at -$123 million. However, the actual trade balance came out much better than expected, at $640 million.

 

United States – Institute for Supply Management (ISM) Manufacturing PMI

On Thursday, at GMT 3:00 p.m., the Institute for Supply Management will release its manufacturing PMI figure for the United States. The ISM’s US manufacturing PMI measures the level of a diffusion index based on a survey of 400 purchasing managers.

Purchasing managers in the United States are involved in the supply side of the economy. As most companies reduce their expenses and production based on their sales forecast, the survey of purchasing managers reveals the overall optimism of various companies in the country. Hence, Forex investors can easily figure out the sentiment regarding the economic condition in the country from the ISM manufacturing PMI readings.

Last month, the ISM manufacturing PMI for the United States came out at 59.7 and the forecast for this month is set at 59.0.

NZD/USD Forecast

The NZD/USD remained highly bullish since the start of December 2017 and formed a well-respected uptrend line over the last few weeks. However, yesterday, the pair broke below the uptrend line. Right now, the pair is trading just above the support around 0.7315.

Although analysts were expecting the trade balance of New Zealand came out at -$123 million, it came out better than expected at $640 million. On the other hand, the estimate for the US ISM Manufacturing PMI is set that the reading this month will drop from 59.7 to 59.0. We believe it would set a bullish fundamental outlook for the NZD/USD this week. Therefore, if the NZD/USD closes above the resistance near 0.7350, 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 0.7350.

BTC/AUD Forecast

After the bitcoin price crashed in December 2017, it remained mostly range bound over the last few weeks. During this sideways price action on the daily chart, the bitcoin always found support near the 13,000 level.

The bitcoin price turned bearish after Tokyo-based cryptocurrency exchange Coincheck got hacked. However, as they announced to compensate clients for their losses, the price of bitcoin became stable in the over the weekend. Nevertheless, the bearish tendency of bitcoin is very strong at the moment.

Hence, Australian bitcoin traders should look out for trading opportunities below this major support level around 13,000.

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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