The Bank of Canada will print its decision in a bit!
Will the event drag NZD/CAD to its trend line support?
Before moving on, ICYMI, yesterday’s watchlist looked at USD/CHF’s 1-hour range ahead of the U.S. manufacturing PMI release. 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:
U.S. ISM manufacturing PMI rises to 58.6 in Feb vs. 58.0 expected
BoE’s Saunders sees inflation risks but might not back big hike againNew Zealand building consents sink 9.2% in Jan vs. 0.4% increase in Dec
Canada’s manufacturing PMI rises slightly to 56.6 in Feb vs. 56.4 expected
U.K.’s BRC: Shop prices rise at fastest rate in a decade (+1.8%) in Feb
Australia’s GDP rebounds by 3.4% in Q4 2021 vs. 3.5% expected, -1.9% in Q3
Biden bans Russian aircraft from the U.S., assembles dedicated taskforce to go after “the crimes of Russian oligarchs”
Oil tops $110 a barrel even after 31 countries agree to release 60 million barrels total from emergency reserves
Stocks slip as Russia sanctions bite
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. ADP report at 1:15 pm GMT
BOC’s interest rate decision at 3:00 pm GMT
Fed Chairman Powell to testify before the House Financial Services Committee at 3:00 pm GMT
U.S. EIA crude oil inventories at 3:30 pm GMT
AU AIG construction index at 9:30 pm GMT
AU building approvals at 12:30 am GMT (Mar 3)
AU trade balance at 12:30 am GMT (Mar 3)
China’s Caixin services PMI at 1:45 am GMT (Mar 3)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: NZD/CAD
Speculations of the Reserve Bank of New Zealand (RBNZ) possibly raising its interest rates pushed NZD higher against its counterparts (including CAD) for most of February.Will the tides change for NZD/CAD now that RBNZ has indeed raised its rates? Take note that the oil-related Loonie CAD has been sneaking in pips across the board as crude oil prices rise to historic levels.
Let’s see if Bank of Canada’s (BOC) policy decision later today will serve as a catalyst for a trend change.
Word around is that BOC will raise its interest rates from 0.25% to 0.50% after keeping its policies steady in its last meeting. BOC members could even talk about more tightening now that oil price hikes are threatening to push Canada’s inflation higher.
NZD/CAD has already reflected CAD’s strength as it formed a Gravestone doji-like pattern AND formed a strong bearish candlestick after hitting the .8625 resistance.
Trend traders can take advantage of the current momentum and Stochastic‘s overbought signal to aim for areas of interest like .8560 or the trend line support near .8540.
Don’t discount a buy-the-rumor, sell-the-news situation though! If NZD/CAD’s bearish momentum loses steam, then you should also prepare for a retest of March’s highs or the .8650 previous resistance area.