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Today we look at EUR/NZD instrument. First, some background.
The EUR/NZD cross has been stuck in rangebound conditions of late as it sought to make a break for the upside.
That looks to be unfolding now and could signal even stronger buying pressure ahead, as the eurozone economy emerges from the pandemic, creating greater demand for the single currency.
Meanwhile, it is a different story for the New Zealand Dollar which continues to trade in a corrective phase against major internationally traded currencies such as the USD, GBP and JPY, as well as the euro.
New Zealand to bring forward tightening?
However, sentiment may be shifting to the view of monetary tightening coming sooner rather than later in New Zealand, with the latest GDP figures underscoring a rebound in the economy.
Gross domestic product was up 1.6% in the first quarter of 2021 according to Statistics New Zealand in its report yesterday (Thursday 17 June). That came in above analyst forecasts which were expecting 0.5% growth, with the Reserve Bank of New Zealand (RBNZ) estimating a decline of 0.6%.
The surge in economic activity follows a contraction in the previous quarter of 1.0%. Annual GDP jumped 2.4%, again beating analyst predictions which had expected a 0.9% increase.
Eurozone inflation registered 2.0% in the Eurostats data released yesterday, with the core inflation figure up 1.0%. The data was in line with forecasts, so no surprises there.
Market participants could interpret soft inflation numbers as indicative of a eurozone economy that is not roaring back as quickly as would be liked.
On the other hand, if inflation jumps in an unexpected way then it could lead to an opposing reaction, given the skittishness of the markets as they attempt to get a handle on inflation expectations.
For now the balance on EUR/NZD still favours the euro, at least on the technicals.
Now let’s get to the trading signal details.
Free Forex Signals EUR/NZD Buy-Stop
We see an entry price of 1.7093 with a stop at 1.6885. See full details below the chart.
Order: BUY STOP
Entry price: 1.7093
Stop Loss: 1.6885
Recommended Risk: 1%
Risk / Reward Ratio: 1:1.9
Signal validity period: Good until cancelled
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