EUR/NZD’s upswing has taken the pair to a short-term resistance zone!
Take a closer look at the 15-minute chart if you’re planning on trading this setup!
Before moving on, ICYMI, yesterday’s watchlist checked out EUR/AUD’s Double Top pattern near the top of a short-term range. e sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Japan’s markets out on bank holiday
S&P Global U.S. Services PMI for February: 51.3 vs. 52.5 previous; Manufacturing PMI was 51.5 vs. 50.7 previous; “Cost pressures dissipate further in February, but growth momentum in service sector softens”
U.S. weekly initial jobless claims: 201K (215K forecast; 213K previous)
U.S. Existing Home Sales for January: 3.1% m/m to 4.0M units (3.0% m/m forecast; -0.8% m/m previous)
EIA crude oil inventories increased by 3.5 million barrels in the week ending Feb. 16 (3.9M expected, 12.0M previous)
New Zealand’s retail sales slumped 1.9% q/q in Q4 2023 vs. expected 0.2% dip; Core retail sales down 1.7% q/q vs. projected 0.1% drop and previous readings downgraded
GfK: U.K.’s consumer confidence unexpectedly fell from -19 to -21 in February amid weaker readings for personal finances and broader economic outlook
Voting FOMC member Christopher Waller said he will need “a couple more months of inflation data” to see if January’s CPI was a fluke, and believes the Fed “can wait a little longer to ease monetary policy”
China’s new home prices dropped by 0.7% y/y in January and marked its seventh straight month of decline and its steepest drop since March 2023
Germany’s GDP was confirmed at -0.3% q/q in Q4 2023 as expected after the Euro Area’s largest economy suffered an investment slump during the period
Switzerland’s non-farm payrolls up by 1.7% y/y in Q4 2023 following a 1.9% y/y uptick in Q3
Price Action News
Overlay of AUD vs. Major Currencies Chart by TradingView
With not a lot of new catalysts, risk assets mostly tracked the optimistic vibe from the previous U.S. session. Commodity-related currencies like AUD and NZD, in particular, took advantage of the risk-friendly vibe and saw intraday uptrends against their major counterparts.
The parties didn’t last long, however. Both AUD and NZD lost ground in early London session trading. There were no direct catalysts for the move though end-of-week profit-taking may have factored in AUD’s (and even NZD’s) weaknesses.
AUD looks set to erase its intraday gains against GBP, USD, and EUR but is still a few pips ahead against CHF, JPY, and NZD.
Upcoming Potential Catalysts on the Economic Calendar:
German IfO business climate at 9:00 am GMT
German Bundesbank President Nagel to give a speech at 10:00 am GMT
Canada’s quarterly corporate profits at 1:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
EUR/NZD: 15-min
EUR/NZD 15-min Forex Chart by TradingView
As mentioned above, commodity-related currencies like AUD and NZD started the day on a strong note as Asian session traders tracked Wall Street’s optimism.
But now it’s the European session traders’ turn and it looks like NZD could be fighting for pips with EUR.
We won’t be seeing top-tier data releases for the rest of the day so traders could pick up cues from the German IfO business climate report due today. Analysts see the index improving from 85.2 to 85.5 in February, which could increase the demand for EUR.Problem is, EUR/NZD is already hitting a technical resistance zone. The pair is trading near 1.7480, which is right at a trend line resistance that’s been around since last week. This time, 1.7480 is also just below the R1 (1.7500) Pivot Point line AND is close to the 100 and 200 SMAs in the 15-minute time frame.
If Germany’s business survey improves as traders are expecting, then EUR/NZD may draw in more buyers and extend its intraday upswing.
A trip to the 1.7520 previous area of interest or R2 (1.7540) Pivot Point line may be on the table if EUR/NZD ends up busting above the resistance zone that we’ve marked.
Don’t discount further NZD strength though! If today’s headlines end up attracting EUR bears instead, then EUR/NZD could go back inside its descending triangle pattern. Look out for a return to the 1.7470 Pivot Point zone if you start to see bearish candlesticks that point to a bearish momentum!
