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At the Forex currency market the New Zealand Dollar rate continues to grow steadily, due to preservation of the USD weakness.  

Forex forecast: MACD indicator is in the positive area for the pair NZD/USD, and is going up, giving a buy signal; volumes are high.  Stochastic Oscillator remains in the overbought zone; however, giving a similar signal.

Forex recommendations: in case of breakdown at the level of 0.8720, the pair will go to 0.8755 and 0.8780.

The pair could drop to 0.8600 as part of correction.According to statistics released on Tuesday, trade balance in New Zealand increased by NZ$230 billion in June against the forecast of NZ$400 billion. Slowdown in surplus was logical in June: volume of growth rate in imports and exports fell last month.

Thus exports increased by 4.5% in Q2, to NZ$12.2 billion; imports dropped by 1%, to the level of NZ$11.8 billion.Exports to China and Australia fell sequentially: to +1.3% y/y (+24.2% y/y earlier) and 1.2% y/y (+4.7% y/y earlier) respectively.CPI in New Zealand rose by 1.0% q/q (+5.3% y/y) in Q2 against the forecast of growth by 0.8% on quarterly basis. It is one more positive characteristic of the economic status in New Zealand.

Statistics released earlier showed that GDP in New Zealand rose by 0.8% on quarterly basis (+1.4% y/y) in Q1 against the forecast of growth by 0.3% q/q (+0.5% y/y). The indices have been very favourable, which supports the NZD. It is possible that the data will be less positive in Q2; however in general, the trend will remain the same, which is favourable for the pair NZD/USD in the long term.

It became known earlier that business sentiment NZIER in New Zealand rose to 27 points in Q2 against -27 points earlier. In general, it is a positive factor.There is speculation in the market that the Reserve Bank of New Zealand is looking closely at market’s reaction to the measures to resolve debt crisis in Europe which might imply a disposition to raise the level of the interest rate at the meeting next week.

Net level of budget deficit in New Zealand rose to -NZD$40 billion (20.4% billion of the country’s GDP) in May, which was below economists’ forecast. According to the estimates of the Finance Minister Mr. English, budget deficit is still too large and active measures are required to reduce it.   

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