With U.S. markets closed on a holiday today, I’m thinking New Zealand’s quarterly PPI might be the sole mover of NZD/USD.
Check out this trend setup I’m looking at.
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.K. house prices stay flat in February vs. previous 0.9% uptick – RightmoveCrude oil turns higher again on Chinese demand forecasts and production limits
PBOC kept prime loan rates unchanged as expected
North Korea reportedly fires another ballistic missile
U.S. and Canadian markets closed for the holiday
Upcoming Potential Catalysts on the Forex Economic Calendar:
Eurozone consumer confidence index at 3:00pm GMT
New Zealand quarterly PPI input and output at 9:45 pm GMT
Australia’s flash manufacturing and services PMIs at 10:00 pm GMT
RBA monetary policy meeting minutes at 12:30 am GMT (Feb. 21)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: NZD/USD
This week is off to a quiet start, as U.S. banks are closed for the Presidents’ Day holiday.
Still, we might get some volatility on NZD/USD since New Zealand is scheduled to print its quarterly PPI report.Number crunchers are betting on a slowdown in price pressures, with the PPI input figure slated to dip from 0.8% to 0.5% and PPI output figure likely to fall from 1.6% to 0.4%.
In that case, Kiwi traders might pare RBNZ rate hike bets now that inflation is kept in check. In contrast, Fed tightening hopes remain strong, following the upside surprises in U.S. data over the past couple of weeks.
I’m seeing a descending trend line connecting the latest highs on NZD/USD, and it looks like this resistance zone is up for another test soon.
This happens to coincide with the 50% Fibonacci retracement level, which is just a few pips above the .6250 minor psychological resistance.
A higher correction could reach the 61.8% Fib that lines up with the 100 SMA dynamic resistance, which is below the 200 SMA to reflect bearish momentum.
In addition, Stochastic is heading south to signal that sellers have the upper hand and might take NZD/USD back down to the swing low close to the .6200 mark again.
Just keep your eyes peeled for either an upside PPI surprise or a strong pickup in risk-taking that might spur a reversal from the selloff!