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NZD/USD is giving us an opportunity to jump on its downtrend by hanging out at a key area of interest!

Before moving on, ICYMI, yesterday’s watchlist looked at EUR/AUD’s pullback opportunities ahead of CPI estimate releases in the Eurozone. 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. GDP drops 1.4% in Q1 2022, shrinks for first time since 2020

U.S. weekly initial jobless claims fall to 180k vs. 180k expected

Japan’s markets out on bank holiday

Beijing orders schools closed in tightening of coronavirus rules

Australia’s producer prices rocket by 21.2% y/y to fresh record highs in Q1 2022

China to cut coal import taxes to zero to ensure energy supply

French economy stalls in first quarter, inflation hits new record

SNB’s Jordan: Higher inflation has not justified interest rate hike

Germany’s import prices up by 31.2% y/y in March, the fastest increase since 1974

U.K. Nationwide house price index eases from 14.3% to 12.1% y/y in April

China tech rally takes Asia shares to best day in six weeks in tense markets

Upcoming Potential Catalysts on the Forex Economic Calendar:

Eurozone’s CPI flash estimate at 9:00 am GMT
Italy’s preliminary CPI at 9:00 am GMT
Canada’s monthly GDP at 12:30 pm GMT
U.S. core PCE price index at 12:30 pm GMT
U.S. personal income and spending at 12:30 pm GMT
U.S. Chicago PMI at 1:45 pm GMT
China’s manufacturing PMI at 1:30 am GMT (Apr 30)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: NZD/USD

NZD/USD 1-hour Forex Chart

NZD/USD 1-hour Forex Chart

There won’t be a parade of top-tier economic reports today, so traders will likely focus on U.S. earnings reports and market sentiment again.

In case you missed it, high-yielding bets like NZD found support against USD after Uncle Sam printed a disappointing GDP report.

See, some traders bet that the weak U.S. growth would make the Fed think twice about its hawkish interest rate hike schedule.

It also helped that the business and consumer components of the report still showed promising trends.

How high can bulls fly?

The animal? Not one inch.

NZD/USD buyers, however, may have enough bullish momentum to push NZD to the 100 SMA and .6550 psychological handle.

My eyes will be on the U.S. core PCE price index, the Fed’s preferred inflation gauge. Markets see its growth tempering from 0.4% to 0.3% in March, though that probably won’t influence the Fed’s tightening schedule much.

Continued risk-taking could push NZD/USD to the 100 SMA or even the 200 SMA zone near .6600.

If today’s releases remind traders of the Fed’s hawkishness, however, or if traders take profits from this week’s risk-taking near the end of the week, then NZD/USD could drop back down to its weekly lows.