Risk-taking brought the Kiwi back to the top of its short-term range earlier on, but are the rallies too good to last? Here’s what I’m looking at.
Fresh Market Headlines & Economic Data:
- Asian shares wobble as investors focus on coronavirus cases outside of China
- Japan confirms two deaths from coronavirus
- Australian economy added 13.5K jobs in January, jobless rate up from 5.1% to 5.3% vs. 5.2% forecast
Upcoming Potential Catalysts on the Forex Calendar:
- Swiss trade balance at 7:00 am GMT
- German GfK consumer climate index at 7:00 am GMT
- U.K. retail sales at 9:30 am GMT
- ECB monetary policy meeting accounts at 10:00 am GMT
What to Watch: NZD/JPY
The previous trading session kicked off on a positive note as China reported fewer new coronavirus cases than usual, but investors couldn’t help but pay attention to the growing number of infections outside of the country.
With that, risk rallies might fizzle out soon and the higher-yielding Kiwi could return its recent gains. On the pair’s 1-hour time frame, it can be seen that NZD/JPY is approaching the top of the range around 71.30 and could retreat back to the bottom near 70.00.Other than the U.K. retail sales release and ECB minutes, there are no major reports lined up for the London session, possibly keeping risk sentiment as a major driving factor.
A short play at the top of the range, with a stop wide enough to weather the NZD/JPY average volatility could work for a risk-off bias.