NZD/USD forms bullish pennant as New Zealand records another surplus

NZD/USD forms bullish pennant as New Zealand records another surplus
  • The NZD/USD pair eased slightly after Statistics New Zealand released mixed trade data.
  • The country's exports rose to more than $5.1 billion in June led by dairy items.
  • Imports rose to $4.6 billion, mainly because of the arrival of the biggest naval ship.

The NZD/USD is little changed as traders react to the mixed trade numbers from New Zealand. The pair is trading at 0.6640, which is slightly below the yesterday’s high of 0.6645.

NZD/USD
NZD/USD wavers after the mixed trade data

New Zealand reports another surplus

According to Statistics New Zealand, the country reported another trade surplus of more than $400 million in June. This surplus happened as the volume of the country’s exports rose to by $107 million to $5.1 billion in June. This jump was mostly because of increased demand for commodities like milk powder, butter, and cheese that reached $1.2 billion.

The exports were also boosted by high log sales. According to the office, logs exports rose by 8.8% after months of declines.  

Meanwhile, imports jumped by $11 million to $4.6 billion. This increase was mostly because of the arrival of the HMNZS Aotearoa, the latest and biggest naval ship. Excluding this ship, the value of imports declined by 8% to $4.2 billion.

Vehicles and parts declined by almost $300 million while petroleum and products fell by more than $200 million. Mechanical and equipment imports declined by more than $70 million. These declines were partially offset by a $32 million increase in electrical machinery, $34 million increase in pharmaceutical products, and $53 million in animal fodder. In a statement, Darren Allan said:

“The arrival of the Navy’s newest and biggest ship has buoyed import totals for June. Without the Aotearoa, imports fell for the third consecutive month, following the start of the COVID-19 alert level 4 lockdown in New Zealand at the end of March.”

Geographically, imports from Australia and China rose by $53 million while those from China rose to $97 million. On the other hand, imports from the European Union, Japan, and the US were in the red.

Recent data from New Zealand have been relatively positive mostly because of how it handled the pandemic. For example, electronic card salesjumped by 16.3% in June while capacity utilisation rose to 92.8%. In June, credit card spending fell by 9.2% after falling by 20.6% in the previous month.

Elsewhere, according to Markit, the manufacturing and services PMIs in Australia increased to 53.4 and 58.5 from the previous 51.2 and 53.1, respectively.

NZD/USD technical forecast

NZD/USD
NZD/USD technical forecast

The NZD/USD pair is trading at 0.6645. On the daily chart, this price is above the 50-day and 100-day exponential moving averages. Also, the price is slightly above the 23.6% Fibonacci retracement level. Also, the pair is above the ascending trend line that is shown in purple.

Most importantly, the NZD/USD pair seems to be forming a bullish pennant pattern. This means that the price is likely to continue rising as bulls target the next the next resistance at 0.6650.

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