The comdolls left the other major currencies eating dust today as commodity prices rocketed.
We don’t have a lot of top-tier reports coming up so you can bet pips that traders will be watching the Brexit negotiations until the end of the week.
Before I show you an opportunity I’ve spotted on GBP/NZD’s chart, take a look at the market themes that dominated the U.S. and Asian sessions:
- McConnell rejects bipartisan Covid relief plan while House adjourns until next week
- FDA panel recommends approval of Pfizer’s Covid vaccine for emergency use
- UK’s Johnson says ‘strong possibility’ of no-deal split in EU trading ties
- EU leaders unblock 1.8 trillion euro budget, recovery fund, eye climate goals
- Bank of Canada doesn’t see housing bubble but it’s watching out, deputy governor says
- Iron ore price goes parabolic after cyclone warning
- New Zealand’s manufacturing sector on track to finish 2020 on a strong note
- New Zealand’s food prices slips by 0.1% from a year ago in November
- Asian shares boosted by vaccines hopes, Brexit deadline casts shadow
- AUD, NZD strongest since 2018 on higher commodity prices
Upcoming Potential Catalysts on the Economic Calendar:
- Germany’s final CPI at 7:00 am GMT
- BOE FPC’s statement and meeting minutes at 7:00 am GMT
- BOE’s financial stability report at 7:00 am GMT
- BOE Governor Bailey to hold a presser at 8:30 am GMT
- Italy’s industrial production at 9:00 am GMT
- EU’s Economic Summit ongoing
What to Watch: GBP/NZD
GBP/NZD is finding support at the 1.8750 minor psychological handle on the 1-hour time frame. And, with Stochastic poppin’ up an oversold signal, you can bet that more than a few pound bulls are paying attention.It’s a bit harder to be a pound fan these days, though. U.K. PM Johnson recently hinted that there’s a “strong possibility” of a no-deal Brexit after the Sunday deadline has passed. It also doesn’t help that vaccine developments have propped commodity prices (and the comdolls) higher in the last few hours.
If London session traders choose to be optimistic about getting a deal before the end of the weekend, then we could see GBP/NZD revisit the 1.8875 zone that lines up with a 38.2% Fib retracement and a previous support area.
Meanwhile, more headlines about a “no-deal Brexit” and continued pound weakness could drag GBP/NZD all the way to the 1.8500 key inflection points on the higher time frames.
What do you think? Which way will GBP/NZD go today?