NZD/USD – Technical Analysis for Forex Trading Australia
New Zealand – GDT Price Index
Tomorrow, the Global Dairy Trade will release the GDT price index, which measures the changes in the average price of dairy products sold at auction in New Zealand.
Since the bulk of New Zealand’s exports to the world market consists of dairy products, the GDT price index acts as a leading indicator of the country’s trade balance because the rising price of dairy products ensures that foreign buyers have to purchase it at a higher price. Therefore, the Forex trading Australia brokers use this data to predict future trade balance, which helps in the valuation of the New Zealand Dollar against other major currencies.
Last period, the GDT price index decreased by -0.4% after decreasing by -0.8% in the previous reporting period. If the trend continues, we would likely see the index go down once more this week.
United States – Building Permits
On Wednesday, at GMT 12:30 p.m., the US Census Bureau will release the Building Permits figure, which is an annualized number of new building permits for the residential housing sector issued during the last month.
Since getting a building permit usually indicate future construction work, Forex investors consider this data to be a leading indicator of the overall economic activity in the country.
Last month, 1.17 million building permits were issued and this month, analysts are expecting the figure to come out around 1.20 million.
Since forming a bearish outside bar on May 10, the NZD/USD has climbed up by around 550 pips and formed an uptrend line in the process. However, last week, the NZD/USD created a bull trap after the pair crossed above the resistance near 0.7350, but fell 40 pips below this level earlier today as soon as the market opened. Currently, the NZD/USD is held by the support near 0.7315.
As the US building permits figure is expected to increase from 1.17 million to 1.2 million, but the New Zealand GDT price index has been declining over the last few months, we believe it would likely set a bearish fundamental outlook for the NZD/USD this week. Under the circumstances, if the NZD/USD breaks below the 0.7315 level, it would likely attract additional bearish momentum in the market.
Hence, Australian Forex traders should look out for trading opportunities below this major support level around 0.7315.
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