Before we look at the setup, you should first see the list of market-moving headlines during the Asian session:
- API data show U.S. oil inventories fell 8.6 million barrels
- Australia’s construction industry slump eases in July 2020
- Australia’s services activity recovery gathers pace in July
- New Zealand unemployment at 4% in surprise fall during coronavirus pandemic
- ANZ World Commodity Price Index gained 2.3% in July
- U.S., Chinese officials to meet Aug. 15 to assess trade-deal compliance
- Caixin: China’s service sector growth sustained at market rate in July
- Pandemic woes keep Japan’s service sector in decline at start of third quarter: PMI
- Trump says Beirut explosion seems to be ‘bomb of some kind,’ cites generals
- Gold shines on falling dollar, yields; pandemic cost concerns drag on shares
Upcoming Potential Catalysts on the Economic Calendar:
- Spain’s services PMI at 7:15 am GMT
- Italy’s services PMI at 7:45 am GMT
- France’s final services PMI at 7:50 am GMT
- Germany’s final services PMI at 7:55 am GMT
- Eurozone’s final services PMI at 8:00 am GMT
- U.K.’s final services PMI at 8:30 am GMT
- Eurozone’s retail sales at 9:00 am GMT
- BOJ Governor Kuroda to give a speech at 12:00 pm GMT
- U.S. ADP report at 12:15 pm GMT
- U.S. ISM non-manufacturing PMI at 2:00 pm GMT
What to Watch: NZD/USD
A quick look at today’s economic calendar tells us that we’ll be seeing a bunch of services PMIs over the next couple of hours.
Unless we see notable hits or misses, though, then these releases will likely factor in the overall market sentiment instead of serving as individual catalysts.If today’s risk-friendly vibe extends to the London session, then we could see NZD/USD extend its intraday gains. Specifically, the currency pair could head to the .6700 psychological handle near last week’s highs.
But what if the bulls are already exhausted? Take note that NZD/USD has already moved its full average daily ATR earlier today.
If risk appetite weakens before the U.S. ADP report and non-manufacturing PMIs are released, then NZD/USD could drop back down to its weekly lows below .6600.