A slew of pro-Kiwi updates pushed the comdoll to the top of the forex heap today.
Can the bulls maintain the momentum during the London session?
Before I show y’all what I’m looking at, check out the top headlines that rocked the forex market scene:
- Fonterra lifts forecast NZ farmgate price as Global Dairy Auction records another rise
- AU construction industry recovery strengthens into 2021
- New Zealand jobs surprise rules out rate cuts, tightening could be back sooner
- Australia building approvals spike in December
- RBA Gov. Lowe: Australia will need ‘very significant monetary support’ for years
- China’s Caixin services PMI falls in January
- Treasury’s Yellen calls top regulator meeting on GameStop volatility, consults ethics lawyer
- New Zealand approves COVID-19 vaccine, warns against nationalism
- U.S. stimulus, vaccine progress encourage equity bulls
Upcoming Potential Catalysts on the Economic Calendar:
- Spain’s services PMI at 8:15 am GMT
- Italy’s services PMI at 8:45 am GMT
- France’s final services PMI at 8:50 am GMT
- Germany’s final services PMI at 9:30 am GMT
- U.K. final services PMI at 9:30 am GMT
- Eurozone’s CPI flash estimate at 10:00 am GMT
What to Watch: NZD/USD
In case you missed it, the New Zealand dollar became the top boss of the Asian session after:
- New Zealand printed (much) better-than-expected jobs numbers in Q4 2020
- The country’s regulators approved its first COVID-19 vaccine (Pfizer)
- Today’s strong dairy auction results prompted upgraded forecasts for dairy prices
- Asian traders took riskier bets over U.S. stimulus and vaccine optimism
As a result, NZD/USD popped up by about 50 pips when the pair sees around 70 pips of movement on a regular Wednesday.The pair is now stuck just under the .7225 range resistance that has been keeping the bulls contained since early January.
Can the bulls maintain their momentum now that Stochastic is hanging out at the overbought area?
If today’s Eurozone PMI and CPI reports come in weaker than markets are expecting, then we could see low key risk aversion that could drag NZD/USD to the .7190 inflection point or even the .7170 mid-range levels.
But if traders keep calm and carry on with their risk-taking, then NZD/USD could break above its January range and head for previous areas of interest near .7250 or .7280.