EURUSD rises as “Janet Yellen” testimony awaits
January 19, 2021
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EURUSD rebounded in Tuesday morning trading in the European market, to trade above its lowest…
AUD/NZD Likely to Break Above Consolidation Zone As Business Confidence in New Zealand Weakens
New Zealand – New Zealand Institute of Economic Research (NZIER) Business Confidence
On Monday, at GMT 10:00 p.m., the New Zealand Institute of Economic Research (NZIER) released its business confidence index. It measures the level of a diffusion index by surveying 2,500 manufacturers, builders, wholesalers, retailers, and various service providers in the country.
The NZIER business confidence index is considered by CFD traders to be an important leading indicator of the economic health of New Zealand. It is because it has a large sample size. In addition, businesses are the first to react to changing market conditions. Hence, a drastic change in the sentiment of businesses can signal future economic growth and overall productivity in the country.
Last month, the NZIER business confidence index reading came out at -6. This month, it went down a lot and came out at -13.
Australia – National Australia Bank (NAB) Limited Business Confidence Index
On Tuesday, at GMT 11:30 a.m., the National Australia Bank (NAB) Limited released its monthly business confidence index figure. It measures the level of a diffusion index based on a survey of 350 businesses in Australia.
The survey asks respondents to rate the current business environment in Australia. Businesses are the first to react to changing business conditions. So, Forex traders consider it as a leading indicator of the overall economic health in the coming months. It is because the level of their sentiment can signal optimism and business confidence in the economy.
Last month, the NAB business confidence index reading came out at 18. This month, it fell slightly to 15, suggesting a bearish effect on the Australian Dollar.
AUD/NZD Forecast
In early November 2020, the AUD/NZD tested the support near 0.7000 but failed to penetrate below this level. Since then, remained in a sustained uptrend. Over the last several months, it has gone up by 990 pips to 0.8000 but fell to 0.7500 at the end of March. For the last two weeks, the AUD/NZD mostly remained range-bound, where 0.7675 acted as a major technical resistance.
The Australian NAB Business Confidence fell slightly over the last period to 15. On the other hand, the NZIER Business Confidence in New Zealand fell to -13. We believe it would set a bullish fundamental outlook for the AUD/NZD this week. Therefore, if the AUD/NZD closes above the resistance near 0.7675, it would likely attract additional bullish momentum in the market.
Hence, CFD traders should look out for trading opportunities above this major resistance level around 0.7675.
Market Analyst / Trading Consultant . 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
