It’s PMI day for the major European economies today!
While the dollar may continue to gain against its major currencies, manufacturing, and services activity in the European region could inspire some serious intraday moves.
Before we check out GBP/NZD’s setup, make sure to read the top headlines that moved the majors during the Asian session:
- Powell and Mnuchin voice optimism but back more economic aid
- Dollar rises after Fed’s Evans comments on quantitative easing
- Australian private sector output returns to growth in September
- Japan’s private sector downturn extends into September
- Australia preliminary retail sales down 4.2% in August, Victoria hit hard
- Westpac’s Evans jolts Australian markets with RBA rate-cut call
- House easily passes stopgap funding bill, averting shutdown
- Gov Bailey plays down odds of BOE negative rates on virus risks
- New Zealand central bank holds rates but hints at further easing
- Oil falls after surprise rise in U.S. crude inventories
Upcoming Potential Catalysts on the Economic Calendar:
- Germany’s GfK consumer climate at 6:00 am GMT
- France’s manufacturing and services PMIs at 7:15 am GMT
- Germany’s manufacturing and services PMIs at 7:30 am GMT
- Eurozone’s manufacturing and services PMIs at 8:00 am GMT
- U.K.’s manufacturing and services PMIs at 8:30 am GMT
What to Watch: GBP/NZD
What’s more, a quick look at the daily chart also tells us that GBP/NZD’s current levels are right around long-term ascending channel support.
Earlier today the Reserve Bank of New Zealand (RBNZ) kept its interest rates steady but noted that members still need to “provide significant economic support for a long time” to hit their targets.As dovish as the news is, it’s a drop in the bucket compared to what pound traders are pricing in.
Aside from the Bank of England (BOE) talking negative interest rates, the U.K. is also dealing with a second wave of COVID-19 cases AND a Brexit that has more drama than an episode of The Real Housewives of Beverly Hills.
But GBP/NZD remains supported by its long-term support levels so it’s worth considering that GBP/NZD could rally at the first signs of positive news.
A break above September’s highs could lead to a retest of the 1.9500 area of interest. A break below its current consolidation, on the other hand, could drag the pound all the way to the 1.8725 levels.