The RBNZ sure did a number on NZD during the Asian session!
Will traders fade the move? Or will the comdoll weaken some more?
I’ll be looking at GBP/NZD for the next couple of hours. But first, here are headlines you’ve missed during the Asian session:
Fresh Market Headlines & Economic Data:
- Oil prices tumble as API reports another inventory build
- BOJ signals pause after months of pandemic-fighting stimulus steps
- RBNZ keeps interest rates and asset purchases unchanged as expected
- RBNZ prepared to “provide additional stimulus as necessary”
- IRS may consider delaying tax filing deadline again, Mnuchin says
Upcoming Potential Catalysts on the Economic Calendar:
- Credit Suisse economic expectations at 8:00 am GMT
- German IfO business climate at 8:00 am GMT
- SNB’s quarterly bulletin at 1:00 pm GMT
- U.S. EIA crude oil inventories at 2:00 pm GMT
What to Watch: GBP/NZD
They will probably take their cues from yesterday’s better than expected PMIs, rising coronavirus cases in the U.S., easing lockdown measures in the U.K., and updates on the U.S.’ trade relationships with partners like Canada and China.GBP/NZD, in particular, could get a lot of attention as it approaches the 1.9400 major psychological handle. As you can see, the level lines up with previous support and the 200 SMA on the 1-hour time frame.
If London session traders extend the anti-Kiwi vibes from the Asian session, or if they focus on the U.K. easing its lockdown measures and printing better-than-expected PMIs, then GBP/NZD could maximize its average daily ATR and hit the 1.9450 – 1.9500 previous areas of interest.
But if market players focus on Brexit-related uncertainty, or if they speculate that further monetary policy easing measures in New Zealand are possible but not likely in the near term, then GBP/NZD could drop back down to its daily open price near 1.9270.