The most important news in New Zealand is published on Tuesday. The trade balance for June will be released at 10:45 p.m. GMT. Starting from March 2019 the situation with trade balance deficit has been improving.
Picture 1. New Zealand’s trade balance
It is getting better thanks to exports. The main commodities being exported are still dairy products: Milk powder, butter, and cheese.
Picture 2. Movement of top export commodities
GDT price index continues to grow this year. Thus, it means that New Zealand’s export-oriented companies will get more revenue and it will help the national economy to grow.
The main direction for export is still China. And as we can see from trading relationships with this country - the trade war has still no impact on NZD. Continuing with the trade war – Chinese official media announced on Monday that trade talks might be reopened BUT only if the US repeals all restrictions. South Chinese Morning Post announced that the US trade representative R. Lighthizer along with Mnuchin will probably visit China next week to launch the new trade-talks round.
In the lack of other crucial news, we think that technical factors will strongly affect the pair NZD/CHF this week. We chose this cross owing to the important technical picture.
The pair reached its crucial level 0,66623. If bulls succeed, we’ll see the breakthrough of 200-EMA and trend reversal with the target 0,67314. Otherwise the movement down will lead the pair to 0,6613 (the previous 38,2% Fibo correction level). We think that bears may try to gain ground.
To sum everything up we recommend to wait till the situation will become less obscure and after that take the decision about opening longs or shorts.