The U.K.’s inflation numbers are coming up! Here’s why GBP/NZD is presenting a good trading opportunity right now.
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- Australia’s wage growth slows further through September
- Australian consumers turn slightly less gloomy in Nov -survey
- New Zealand annual food prices up in year to October
- RBNZ surprisingly keeps OCR unchanged at 1.00%
- Japan’s producer prices down in October
- WSJ: Tariffs on China imports emerge hurdle to trade deal
Upcoming Potential Catalysts on the Forex Calendar:
- U.K.’s annualized CPI report at 9:30 am GMT
- U.K.’s house price index at 9:30 am GMT
- Euro Zone’s industrial production at 10:00 am GMT
- U.S.’ inflation numbers at 1:30 pm GMT
- Jerome Powell’s first day of testimonies in D.C. at 4:00 pm GMT
What to Watch: GBP/NZD
The Reserve Bank of New Zealand (RBNZ) surprised markets when it kept its official cash rates steady at 1.00%. What’s more, Governor Orr also suggested that the central bank is in no hurry to ease further, nor are they eager to explore “unconventional” monetary policy tools right now.
Meanwhile, the U.K. is publishing its annualized consumer prices in October. Markets see the headline CPI slowing down for the month, while the core figure could maintain its 1.7% growth.
NZD’s strength dragged GBP/NZD to a range support. If U.K.’s CPI numbers print lower than markets’ already weak expectations, then we could see the pair break below its range and dip below the big 2.0000 that’s closer to a 4-hour uptrend support.
If consumer prices grow faster than expected, however, then we could see GBP/NZD retest its 2.0300 range resistance highs.
MarketMilk is currently in favor of the bulls as the RSI, Stochastic, Williams %R, AND the Keltner Channels are all flashing “oversold” signals on the 1-hour time frame.
If you’re planning on trading GBP/NZD during the U.K.’s CPI release, then make sure to use AT LEAST a 60-pip stop as GBP/NZD tends to move by 50 pips or so PER HOUR in the first hours of London trading.
