With tons of mid-tier data scheduled in the euro zone, I’ve got my eye on a downtrend setup for EUR/NZD. Here’s what’s up.
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- Canada third-quarter current account deficit widens to C$9.86 billion
- New Zealand building consent issues down to ‘perfect storm’
- Japan’s factory output posts largest fall in almost two years
- Japan’s jobless rate remains at 2.4% in Oct amid labor crunch
- Tokyo core CPI rises 0.6% from a year ago in November
- Kuroda warns BOJ isn’t keeping rates low to fund fiscal spending
- Credit growth slows in October: RBA
- China’s PBOC has room to ease policy but won’t squander options – official
- North Korea test fires rockets in Thanksgiving reminder of year-end deadline for U.S.
- UK Consumer Confidence flatlines at -14 in November
- Stocks hesitate just short of new peaks as clouds darken over U.S.-China ties
- Japan’s consumer confidence up 2.5 points from the previous month in November
- Japan’s housing starts dips by 7.4% (y/y) in October
Upcoming Potential Catalysts on the Forex Calendar:
- Germany’s retail sales at 7:00 am GMT
- France’s consumer spending at 7:45 am GMT
- France’s preliminary CPI at 7:45 am GMT
- France’s preliminary GDP at 7:45 am GMT
- Germany’s employment change at 8:55 am GMT
- Italy’s unemployment rate at 9:00 am GMT
- U.K.’s mortgage approvals and individual lending at 9:30 am GMT
- Euro Zone’s CPI flash estimate at 10:00 am GMT
- Euro Zone’s unemployment rate at 10:00 am GMT
- Italy’s preliminary CPI at 10:00 am GMT
- Canada’s monthly GDP at 1:30 pm GMT
What to Watch: EUR/NZD
There will be no top-tier news scheduled during the London session, but mid-tier reports such as Germany’s retail sales and employment data should get the traders’ attention.
Markets generally see today’s euro zone reports printing weaker numbers compared to the previous month. Not surprising after economic markers like euro zone and Germany’s manufacturing PMIs have seen weak readings.
On the other side of the trade, NZD stands to benefit from optimism over the U.S.-China trade negotiations. Until China officially retaliates over Trump signing the bill backing Hong Kong protesters’ rights, high-yielding bets like Kiwi will likely benefit from “phase one” deal speculations.
For now, MarketMilk™ is confirming EUR/NZD’s bearish bias on both short and long-term moving averages:
Shorting at current levels with stops above the falling trend line and the 200 SMA could still make for a decent reward-to-risk ratio especially if EUR/NZD hits new weekly lows or drops down to the 1.7000 area of interest.
Not sure how big you should set your stop losses? Note that EUR/NZD tends to move by 80 pips or so on Fridays for the past 30 days.