Forex Market: EUR/NZD daily trading forecast

Yesterday’s trade saw EUR/NZD within the range of 1.5794-1.5949. The pair closed at 1.5828, losing 0.48% on a daily basis.

At 6:36 GMT today EUR/NZD was up 0.14% for the day to trade at 1.5850. The pair touched a daily high at 1.5860 at 6:25 GMT.

Fundamental view

Euro zone

German ZEW Economic Sentiment

The gauge of economic sentiment in Germany probably continued to fall, reaching 5.0 in September, according to the median forecast by experts. In August the index came in at 8.6, which has been the lowest level since December 2012. The indicator has been falling since December 2013, when it stood at 62.0.

The ZEW (Zentrum für Europäische Wirtschaftsforschung) economic expectations index is published monthly. The study encompasses up to 350 financial and economic analysts. The indicator reflects the difference between the share of analysts, that are optimistic and those, that are pessimistic about the expected economic development in Germany over the next six months. A positive value indicates that the proportion of optimists is larger than that of pessimists. A ZEW reading of -100 suggests that all analysts are pessimistic about the current developments and expect economic conditions to deteriorate. A ZEW reading of 100 implies that all analysts are optimistic about the current situation and expect conditions to improve. A ZEW reading of 0 indicates neutrality.

The index of current assessment in Germany probably dropped to 40.0 in September from 44.3 in the prior month.

Euro zone ZEW Economic Sentiment

The ZEW Economic Sentiment index in the Euro zone probably fell to 21.3 this month from 23.7 during August.

Lower-than-projected readings would certainly cause a negative impact on the common currency. The official data is scheduled to be released at 9:00 GMT.

New Zealand

New Zealands current account probably produced a deficit at the amount of 1.000 billion NZD during the second quarter of the year compared to Q1, following a deficit of 0.585 billion NZD in the first quarter.

The current account reflects the difference between nation’s savings and its investments. It is the sum of the balance of trade, net current transfers (cash transfers) and net income from abroad (earnings from investments made abroad plus money sent by individuals working abroad to their families back home, minus payments made to foreign investors).

A current account surplus indicates that a country’s net foreign assets have increased by the respective amount, while a deficit suggests the opposite. A country with a surplus on its current account is considered as a net lender to the rest of the world, while a current account deficit puts it in the position of a net borrower. A net lender is consuming less than it is producing, which means it is saving and those savings are being invested abroad, or foreign assets are created. A net borrower is consuming more than it is producing, which means that other countries are lending it their savings, or foreign liabilities are created. Therefore, a contracting surplus or a widening deficit on the current account of a nation usually has a bearish effect on its currency.

Statistics New Zealand is to release the official report at 22:45 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.5857. In case EUR/NZD manages to breach the first resistance level at 1.5920, it will probably continue up to test 1.6012. In case the second key resistance is broken, the pair will probably attempt to advance to 1.6075.

If EUR/NZD manages to breach the first key support at 1.5765, it will probably continue to slide and test 1.5702. With this second key support broken, the movement to the downside will probably continue to 1.5610.

The mid-Pivot levels for today are as follows: M1 – 1.5656, M2 – 1.5734, M3 – 1.5811, M4 – 1.5889, M5 – 1.5966, M6 – 1.6044.

In weekly terms, the central pivot point is at 1.5777. The three key resistance levels are as follows: R1 – 1.6039, R2 – 1.6176, R3 – 1.6438. The three key support levels are: S1 – 1.5640, S2 – 1.5378, S3 – 1.5241.