We’re kicking off the new week with a simple technical setup on AUD/NZD, a picture that could shift quickly with top tier New Zealand economic data on the way.
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 12388.56 +0.53% FTSE: 7536.87 +0.41% S&P 500: 3013.25 -0.02% DJIA: 27328.06 -0.01% |
US 10-yr 2.096% -0.01 Bund 10-YR -0.254% -0.046 UK 10-YR: 0.791% -0.048 JPN 10-YR: -0.119% +0.03 |
Oil: 60.66 +0.38% Gold: 1415.60 +0.22% Bitcoin: 10555.00 +1.37% Etherium: 231.75 -1.06% |
Fresh Market Headlines & Economic data:
- The Empire State Manufacturing Survey rose thirteen points to 4.3 in July
- China posts its lowest quarterly growth in 27 years as the trade war drags on
- China June industrial output up 6.3% year-on-year, beats forecasts, retail sales up 9.8%
- Oil prices edge higher on Chinese economic data
- Rightmove U.K. HPI: The price of property coming to market falls by 0.2%, the first monthly fall so far in 2019
- Hammond pledges to fight a no-deal Brexit from outside government
- New Zealand visitor numbers down in May
- New Zealand: Softer services sector points to slowing economy – BNZ
Upcoming Potential Catalysts on the Forex Calendar:
- New Zealand CPI q/q at 11:45 pm GMT
- RBA monetary policy meeting minutes at 2:30 am GMT (July 16)
- U.K. earnings, unemployment rate & claimant count at 9:30 am GMT (July 16)
- Europe ZEW economic sentiment at 10:00 am GMT (July 16)
- U.S. retail sales & import prices at 1:30 pm GMT (July 16)
- Canada Foreign securities purchases at 1:30 pm GMT (July 16)
What to Watch: AUD/NZD
On the one hour chart above of AUD/NZD, the pair has been in a slow grind lower since finding a swing high around 1.0550. It’s starting to form somewhat of a descending channel, with the market currently in the middle of the downtrending range.
That picture could change quickly later today as we get New Zealand’s quarterly consumer price index number, an important input the RBNZ’s monetary policy decisions. The last time we saw this data point back in April, the pair popped well over 1.00% (over 100 pips) higher on a disappointing read, so we can expect a good amount of volatility for this pair, or any Kiwi pair, during the very early Asia session trade.
For AUD/NZD bears, a weaker number is not expected at the moment (0.6% forecast vs. 0.1% previous), so we probably have to see a much strong number than expectations for a significant move lower. It’s probably a good idea to wait for the release to see if there is a retest of the top of the channel to short at a better price if the number does come out positive. Also keep in mind too that 1.0450 seems to have become a minor support area, so a break there on positive NZ news should be considered as a signal to short too if it holds.
For AUD/NZD bulls, a weaker-than-expected NZ CPI number could possibly get buyers excited, and the weaker the better, especially if it’s weaker than the previous read of 0.1%. In that situation, look for a break of the falling ‘highs’ before considering a long position. And for the more conservative traders out there, a break and retest/hold of the falling ‘highs’ is a very strong signal that a short-term uptrend may be in the cards.
