EURUSD fell at the beginning of trading today, in the European market, and recorded its…
EUR/NZD Downtrend Likely to Continue Amid Improved Trade Balance in New Zealand
EURNZD Weekly Outlook: 25th November 2020
Eurozone – German Final GDP
On Tuesday, at GMT 7:00 a.m., the Destatis released the quarter-over-quarter German Final GDP figure. It measures the changes in the value of all products and services produced by the German economy. However, this figure is adjusted for inflation in order to provide more accurate data.
Forex Brokers in New Zealand consider the German GDP to be one of the most vital fundamental indicators of measuring the production in the Eurozone economy. Because the German economy makes up a large part of the entire Eurozone economic activities.
Last quarter, the German final GDP grew by 8.2%. This quarter, analysts were expecting an increase of 8.2%. However, the actual forecast came out much better, at 8.5%.
New Zealand – Trade Balance
On Wednesday, at GMT 9:45 p.m., Statistics New Zealand released the national trade balance figure. It measures the difference in the value between net imports and net exports 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 for their domestic currency. Hence, economists and Forex traders consider the trade balance to be an important indicator of the health of New Zealand’s economy.
Last month, the trade balance figure of New Zealand came out at -1025 million. This month, the analysts were expecting it to come out slightly better, at -500 million. The actual result came close to the estimate, at -501 million.
Since October 20, 2020, the EUR/NZD remained in a strong downtrend. Over the last month, it fell by around 1070 pips. During this strong downtrend, the EUR/NZD broke below a few notable support levels, including the 1.7160 level. The 1.7160 level acted as major support back in July 2020. For the last two consecutive days, the EUR/NZD also found temporary support near the 1.6980 level. Currently, it is trading just above the 1.6980 level.
The German Final GDP came out slightly better than the estimate, 8.5% against 8.2% growth. On the other hand, the Trade Balance of New Zealand improved from -1025 million to -501 million. We believe it would set a bearish fundamental outlook for the EUR/NZD this week. Therefore, if the EUR/NZD closes below the support near 1.6980, it would likely attract additional bearish momentum in the market.
Hence, CFD traders should look out for trading opportunities below this major support level around 1.6980.
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 email@example.com