Bulls are defending this channel bottom on EUR/NZD, but can upcoming data from the euro zone give them another boost? Here’s what I’m looking at.
Currency Snapshot:
Fresh Market Headlines & Economic Data:
- BOJ kept monetary policy unchanged as expected
- Bank of Japan upgraded growth forecasts on easing trade war risks
- BOJ maintained inflation estimates, keeping forecast below 2% until 2022
- BOJ Quarterly Report: Risks skewed to the downside
- Asian shares spooked by Chinese Coronavirus scare
- US President Trump and French President Macron call truce on digital tax
Upcoming Potential Catalysts on the Forex Calendar:
- U.K. claimant count change and average earnings index at 9:30 am GMT
- German and euro zone ZEW economic sentiment indices at 10:00 am GMT
What to Watch: EUR/NZD
This pair has been hovering at its ascending channel support for quite some time, but it looks like buyers are keen on keeping this area intact.
A bounce could take EUR/NZD back to the channel top or at least until the mid-channel area of interest while a break below support could set off a reversal from the climb.
Price has formed higher lows to signal the presence of bullish momentum, but the move could still hinge on the outcome of the ZEW economic sentiment surveys to be released today. Analysts are hoping to see improvements that could keep optimism in play ahead of the ECB decision later in the week.
The trend analysis tool shows that the pair is mostly bullish. Going long at market if the reports turn out stronger than expected could work out for a short-term trade, provided the stop is wider than the average daily volatility of 81.5 pips.
