NZD/USD trading idea from November 7
On Tuesday, NZD/USD continues to develop downward dynamics, formed by the "bearish" impulse of yesterday, and trades near the 0.5930 mark. The pair is pressured by weak statistics from China - the main trading partner of New Zealand.
According to the statistics, China's exports lost 6.4% in October, while imports grew by 3%. The trade balance of the Celestial Empire decreased from $77.71 bln. to $56.53 bln. with forecasts of growth up to $81.95 bln.
The Reserve Bank of Australia held a meeting today and decided to raise the interest rate by 25 basis points to 4.35%. The Reserve Bank of New Zealand will meet on November 29. Inflationary pressure conditions in neighboring countries are about the same, and it is not excluded that the RBNZ will also conduct an act of monetary restriction. This may support the rate of the New Zealand dollar.
In addition, the NZD/USD is influenced by the dynamics of the US dollar. On Friday, the "American" shed after the release of a weak labor market report, according to which only 150 thousand jobs were created in October, the unemployment rate rose from 3.8% to 3.9%, and the growth of average wages, on the contrary, declined.
On Wednesday, Jerome Powell's speech will take place, from which investors want to learn about the outlook for the Fed's monetary policy. If the Fed's speech will not be hawkish, it will be difficult for the USD to regain its lost positions.
We believe that after the corrective decline the pair will return to growth and we suggest including a buy order for NZD/USD in the trader's diary.
- Buy-stop 0.5950
- take-profit 0.6200
- stop-loss 0.5880