With another top-tier leading indicator due from the euro zone, this pair could either bounce or break from the range support it’s currently testing.
Risk sentiment seems to be supporting the Kiwi while mostly downbeat euro zone PMIs earlier this week also favor a break lower.
But first, here’s a quick glance at how the majors are performing:
Currency Snapshot
Fresh Market Headlines & Economic Data:
- U.K. GfK consumer confidence index steady at -34 vs. -40 consensus
- Japanese national core CPI down from 0.6% to 0.4% as expected
- Japan’s all industries activity index sank 0.6% vs. projected 0.4% dip
- U.S. House approved $484 billion small business aid package
- Treasury Secretary Mnuchin considering oil industry bailout
- Fed to expand access to PPP liquidity facility
- CME hiked margin on oil futures contracts again, brokerages add restrictions
- China cut targeted medium-term lending facility interest rates
Upcoming Potential Catalysts on the Economic Calendar:
- U.K. retail sales at 7:00 am GMT
- German GfK business climate index at 9:00 am GMT
What to Watch: EUR/NZD
This pair is sitting right at the bottom of its range on the 1-hour chart, still deciding whether to make a bounce or a break.
The upcoming German GfK consumer climate index could determine where this pair might be headed next, as a disappointing result could spur a breakdown.If that happens, EUR/NZD might fall by around the same height as the rectangle pattern, which spans 1.7900 to 1.8275.
A bounce, on the other hand, could lead to a rally back to the range resistance.
Although price action seems to have calmed down in the past few sessions, risk appetite still appears to be slightly in favor of higher-yielding assets as traders remain hopeful that stimulus efforts could keep economic damages in check.This could be bullish for the Kiwi, which has also enjoyed strong support from upbeat data and improving coronavirus-related updates lately.
A straddle setup could be a good option if you’re undecided which direction to play. Just make sure you check the average EUR/NZD volatility when setting stops and entries!