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We’ve got a potential Fib retracement setup in the works on AUD/NZD, which could pick up speed with the latest Australian PMI and NZ commodity prices data right around the corner.

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a potential short-term reversal underway in EUR/USD, so be sure to check that out to see if there is still a potential play!

Intermarket Update:

Equity Markets Bond Yields Commodities & Crypto
DAX: 15212.68 +0.70%
FTSE: 6823.55 +1.28%
S&P 500: 4073.94 -0.10%
NASDAQ: 13698.38 -0.05%
US 10-YR: 1.656%  -0.064
Bund 10-YR: -0.32% -0.003
UK 10-YR: 0.788% -0.01
JPN 10-YR: 0.112% +0.005
Oil: 59.39 +1.26%
Gold: 1,743.40 +0.845%
Bitcoin: 58,280.25 -0.85%
Ethereum: 2,115.52 +0.54%

Fresh Market Headlines & Economic Data:

Dow falls nearly 100 points from a record high, S&P 500 breaks a 3-day winning streak

 IMF boosts global growth forecast, warns of diverging rebound

EU backs U.S. call for global minimum corporate tax, but rate to be decided

U.S. job openings rose to a two-year high in February

Spanish unemployment fell by -1.5% in March, largest m/m decline since  2015

Italy loses almost one million jobs in a year to the coronavirus crisis

In February 2021, the euro area seasonally-adjusted unemployment rate was 8.3%, stable compared with January 2021 and up from 7.3% in February 2020

ECB’s Wunsch predicts healthy rebound but bumpy crisis exit

Euro zone investor morale rises in April to highest since Aug 2018

Upcoming Potential Catalysts on the Economic Calendar

Australia Construction Index at 10:30 pm GMT
Australia Composite PMI at 11:00 pm GMT
New Zealand Commodity Prices at 1:00 am GMT (Apr. 7)
Japan Leading Economic Index at 5:00 am GMT (Apr. 7)
Various European Services PMIs starting 7:15 am GMT (Apr. 7)
Euro area Services PMI at 8:00 am GMT (Apr. 7)
U.K. Services PMI at 8:30 am GMT (Apr. 7)

What to Watch: AUD/NZD

AUD/NZD 1-Hour Forex Chart
AUD/NZD 1-Hour Forex Chart

On the one hour chart of AUD/NZD above, we can see the pair was in a simple downtrend last week before finding a bottom around the 1.0800 handle. That was followed by a bounce higher to the minor support area around 1.0880, and given that we’re seeing some resistance/reversal as stochastic signals short-term overbought, it might be a good time to re-enter a bearish position.

Well, we do have some data ahead to be aware of, most notably the latest services and construction data from Australia, and if we do see weaker-than-expected updates from the leading economic indicators, that could be enough to draw sellers into the textbook technical setup above.

If that scenario does play out, it wouldn’t be out of the question for the market to return to the previous swing low / major psychological level within a session or two given its daily ATR of around 50 pips.

Be aware of broad risk sentiment as well before considering a directional bias as the Aussie tends to out perform the Kiwi during times of negative global risk sentiment. If we continue to see bearish vibes across the financial markets as we saw today, AUD/NZD may make its way to the 1.09000 handle before the short-term rally loses its steam.