High-yielding currencies took more hits against the Greenback during today’s Asian session trading.
Will today’s releases turn the tides for NZD/USD?
If you’ve missed the last couple of hours of trading, then here’s a list of the top headlines from the late U.S. and early Asian sessions:
Major Forex Pairs Price Performance from MarketMilk
- Fed’s Quarles says he is optimistic about outlook for U.S. economy
- Fed’s Evans says he expects 2% inflation by 2023, but no rate hikes
- Fed’s Rosengren says economy is more fragile than data suggests
- Powell: we’ve “done basically all of the things that we can think of”
- Trudeau pledges to create 1 million jobs, make ‘significant’ investment in child care in throne speech
- NZ: Export boom and import plunge drives big trade surplus
- Australia to overhaul bankruptcy laws to help firms over COVID-19
- Australian Treasurer Josh Frydenberg sets 6% threshold in recovery plan
- BOJ Kuroda stresses readiness to ease further, warns of high uncertainty
- Some in BOJ warned pandemic could delay Japan’s recovery – July minutes
- China’s slow consumption recovery upset by wary low-income households
- Asian shares tumble as global recovery hopes falter
- Australia, New Zealand dollars crippled by rate-cut bets, weak risk appetite
Upcoming Potential Catalysts on the Economic Calendar:
- SNB’s policy decision at 7:30 am GMT
- ECB’s economic bulletin at 8:00 am GMT
- Germany’s IfO business climate at 8:00 am GMT
- U.S. initial jobless claims at 12:30 pm GMT
- BOE’s Bailey to give a speech at 2:00 pm GMT
What to Watch: NZD/USD
NZD/USD 1-hour Forex Chart
The Swiss National Bank (SNB) will be under the spotlight today but market analysts aren’t really expecting any bombshells from the central bank.
With no other major data scheduled, it’s likely that the majors will dance to the tune of market risk sentiment for another day.
I’m keeping my eye on NZD/USD, which has reached a key range support and is sporting an oversold Stochastic signal on the 4-hour time frame.The Kiwi’s bearish momentum seems to be losing steam and I think that makes it a good candidate for a reversal in case we see a risk-friendly environment in the next trading sessions.
If we see optimistic statements or pledges of more stimulus from both Powell and Mnuchin today, then some Kiwi bulls could come out of their “hi-BEAR-nation” and push the comdoll higher. The .6600 handle is a good target if you consider NZD/USD’s average daily volatility of 66 pips.
If risk aversion continues to drag on the higher-yielding bets, though, then NZD/USD could finally break below its 4-hour range and maybe revisit previous areas of interest near .6500 or .6450.
