Risk-off flows seem to be in play lately, so I’m eyeing a potential breakdown on this triangle pattern.
Check out this potential selloff on NZD/JPY!
Before moving on, ICYMI, yesterday’s watchlist checked out EUR/GBP’s area of interest ahead of the BOE decision. 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:
OPEC+ agreed to increase production but hands are tied
U.S. gov’t to buy back 60 million barrels of crude oil from SPR releaseAsian markets tumble as China doubles down on zero-COVID policies
RBA monetary policy statement: More rate increases needed
Swiss jobless rate unchanged at 2.2% as expected
German industrial production slipped by 3.9% vs. projected 1.3% drop
U.K. Halifax HPI up by 1.1% vs. projected 0.7% increase
French private payrolls increased by 0.3% vs. 0.2% consensus in Q1
Upcoming Potential Catalysts on the Forex Economic Calendar:
Canadian employment change at 12:30 pm GMT
U.S. non-farm payrolls at 12:30 pm GMT
Canadian Ivey PMI at 2:00 pm GMT
FOMC members Bullard and Waller to testify at 11:15 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
NZD/JPY is stuck inside a descending triangle consolidation pattern, but it looks ready to break free soon. Price is already testing the support around the 83.50 minor psychological mark, with technical indicators pointing to more losses.The 100 SMA is below the 200 SMA to suggest that the path of least resistance is to the downside or that support is more likely to break than to hold.
If that happens, NZD/JPY could tumble by the same height as the chart formation or roughly 200 pips, so watch out!
At the same time, Stochastic is heading south after barely making it to the overbought region, hinting that sellers are eager to get back in the game.
If support holds, however, another bounce back to the top of the triangle around 84.00 might follow.
There are no major reports lined up from New Zealand for the rest of the week, but it’s worth noting that risk-off flows have surged earlier today when China reinforced its zero-COVID policies.
This might mean another heavy blow to global business activity and supply chains, which could then drag higher-yielding currencies like the Kiwi lower.