A lack of economic data catalyst means risk playas are in charge!
How will bulls and bears play NZD/JPY hitting an established short-term resistance?
Before moving on, ICYMI, yesterday’s watchlist looked at USD/CAD possibly hitting and then turning from a top of a range resistance. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Philly Fed index indicates slower growth in Feb (16.0 vs. 19.9 expected)
U.S. weekly jobless claims unexpectedly rise by 248K (vs. 217K expected)US: housing starts fall by 4.1% in Jan, building permits rise by 0.7%
Fed’s Bullard repeats call for 1 percentage point in rate increases by July 1
Fed’s Mester backs swift, more aggressive Fed strategy than during ’07-’09 recession to tame high U.S. inflation
New Zealand producer price output up 1.4% on quarter in Q4
Japan’s consumer prices rise by 0.2% in Jan, slower than 0.5% in Dec
U.K. retail sales up by 1.9% in Jan after a 4.0% decline in Dec and marks the fastest increase since April
U.S. Sec of State Blinken to meet Russia’s Lavrov next week if there’s no Ukraine invasion
Upcoming Potential Catalysts on the Forex Economic Calendar:
Canada’s retail sales reports at 1:30 pm GMT
Eurozone’s consumer confidence at 3:00 pm GMT
U.S. existing home sales at 3:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: NZD/JPY
In case you missed it, risk-takers came out to play after Russian Foreign Minister Sergei Lavrov agreed to meet U.S. Secretary of State Antony Blinken in Europe next week.
This is after Biden has said that the possibility of Russia invading Ukraine is still “very high” amidst reports of military buildup in Ukraine’s borders.
The possibility of diplomatic solutions played well with markets that are already worrying that major central bankers are raising rates too quickly to combat high inflation.
NZD/JPY found support from the SMAs on the 1-hour chart and is now trading at the 77.50 zone that’s been an inflection point for the pair since mid-January.There are no economic reports scheduled today that may influence overall market sentiment. This means that traders may continue to focus on geopolitical concerns.
In NZD/JPY’s case, some traders may start pricing the Reserve Bank of New Zealand (RBNZ) possibly raising rates next week.
Traders who are betting on action in Ukraine’s borders over the weekend can take cues from Stochastic’s overbought signal and start selling around the current levels.
If the last 1-hour SMA crossovers are any clues, then NZD/JPY has room for a bearish run.
Meanwhile, Kiwi bulls or yen bears who believe that the risk-friendly theme would extend to the U.S. session can start making trading plans for an upside breakout. Just make sure to trade a legit breakout and not a fakeout!