The U.K. is set to print a potentially downbeat mid-tier report while this pair closes in on a test of resistance.
Apart from that, there’s not much in the way of top-tier catalysts in the upcoming London session, so inflection points might just hold.
But first, here’s a quick glance at how the majors are performing:
Currency Snapshot
Fresh Market Headlines & Economic Data:
- Oil prices on another leg lower due to storage concerns
- More U.S. states ease lockdown restrictions
- New York Governor Cuomo to extend stay-at-home orders in some parts of the state
- Australia permits home visits, reopens beaches
- South Korean President warns impact of coronavirus to increase
- Japanese jobless rate rose from 2.4% to 2.5% as expected
- BOJ increased size of JGB purchases in latest bond auction
- Westpac projects RBNZ will cut rates to -0.50% later in the year
- New Zealand gov’t relaxes social distancing rules but PM Arden recommends staying at home if possible
Upcoming Potential Catalysts on the Economic Calendar:
- Spanish unemployment rate at 8:00 am GMT
- U.K. CBI realized sales index at 11:00 am GMT
What to Watch: GBP/NZD
This pair is hanging out inside a descending triangle visible on the 1-hour chart and may be gearing up for a test of resistance.
If the top of the triangle is able to keep gains in check, GBP/NZD could slide back to the bottom at the 2.0500 major psychological support.On the other hand, a break higher could set off a climb that’s around the same height as the chart formation.
There’s not much in terms of top-tier data from the U.K. or New Zealand today, though, so consolidation could be the name of the game.
Keep in mind that sterling is coming off a dismal performance in the previous week, so there’s a chance that pound bears could be ready to return soon.
Meanwhile, New Zealand is already starting to loosen lockdown restrictions, which could mean a pickup in economic activity. Just stay on the lookout for major swings in sentiment as the U.S. earnings season is upon us.
A straddle setup could be a good option if you’re undecided which direction to play. Also, make sure you check the average GBP/NZD volatility when setting stops and entries!