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Big volatility to start the week as currency moves highlight a busy start. And with Kiwi jobs data ahead, will NZD/JPY make fresh moves lower?

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 11675.11 -1.66%
FTSE: 7221.66 -2.50%
S&P 500: 2874.05 -1.99%
DJIA: 25957.82 -1.99%
US 10-yr 1.753% -0.102
Bund 10-YR -0.518% -0.026
UK 10-YR: 0.503% -0.047
JPN 10-YR: -0.196% -0.035
Oil: 57.04 -2.63%
Gold: 1423.70 -0.98%
Bitcoin: 11784.00 +7.33%
Etherium: 231.60 4.03%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • New Zealand employment q/q at 11:45 pm GMT
  • Australia trade balance & job ads at 2:30 am GMT (Aug. 6)
  • RBA monetary policy decision at 5:30 am GMT (Aug. 6)
  • German factory orders at 7:00 am GMT (Aug. 6)

What to Watch: NZD/JPY

NZD/JPY 1-Hour
NZD/JPY 1-Hour Forex Chart

China retaliated over the weekend to the latest tariff thread from the U.S. by weakening the yuan and halting imports of U.S. agricultural products. This sent the markets into big time risk aversion mode to start the week, which was highly beneficial to the Japanese yen.

Looking forward, we’ve got a few top tier economic events right around the corner, and we’ll focus on the Kiwi as its quarterly employment conditions update should help volatility stay elevated in NZD/JPY, which is in a strong downtrend thanks to the latest negative updates in the U.S.-China trade story.

For NZD/JPY bears, the odds are currently on your side given the trend lower, but if we see  better-than-expected NZ jobs data this could temporarily halt or reverse the downtrend in the short-term (depending on any new developments on the trade war front). This makes the area around 70.00 – 70.50 (Fibonacci retracement area) the one to watch for reversal short patterns to play the downtrend at a better price. If the jobs data disappoints (not expected), then a break of the swing lows around the 69.00 handle is the signal to start putting work into NZD/JPY for a potential short idea.

For NZD/JPY bulls, it’ll likely take a huge positive surprise for New Zealand jobs data AND a positive turn in the U.S.-China trade war to break the downtrend, but if that scenario plays out, a short-term counter trend play may not be such a bad idea if a break above the 70.50 handle can be sustained and bullish candles form fresh support.