Partner Center Find a Broker

Despite a busy week in the markets, NZD/USD has consolidated into a potential breakout play in the upcoming session. Will upcoming data be enough to get the pair out of its tight range?

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 11441.29 -0.45%
FTSE: 7026.17 -1.20%
S&P 500: 2850.28 +0.34%
DJIA: 25542.33 +0.25%
US 10-yr 1.574% -0.007
Bund 10-YR -0.683% -0.034
UK 10-YR: 0.444% -0.004
JPN 10-YR: -0.224% +0.016
Oil: 54.44 -1.43%
Gold: 1526.10 -0.11%
Bitcoin: 10073.21 +0.06%
Etherium: 184.50 -1.37%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • U.S. TIC net Long-term Transactions at 9:00 pm GMT
  • New Zealand manufacturing index at 11:30 pm GMT
  • Euro area trade balance at 10:00 am GMT (Aug. 16)
  • U.S. Building permits & housing starts at 1:30 pm GMT (Aug. 16)
  • U.S. consumer sentiment index at 3:00 pm GMT (Aug. 16)

What to Watch: NZD/USD

NZD/USD 1-Hour Forex Chart
NZD/USD 1-Hour Forex Chart

It’s a been a wild ride for traders over the past few days with risk aversion sentiment rocketing higher on geopolitical risks and bond market recession signals hitting this week. Even so, NZD/USD price action has actually tightened up around the 0.6450 handle, forming a symmetrical triangle in the process.

So we’ve got a simple technical setup to follow for the last watchlist post for the week: a bullish signal if the market breaks the falling ‘highs’ pattern or a bearish signal if the market breaks the rising ‘lows’ pattern. And we do have potential catalysts for volatility to rise in the form of the upcoming New Zealand manufacturing index and a slew of U.S. leading economic indicators (building permits & consumer sentiment).

For the bulls, if we do get a bullish out look from the NZ business sector and an upside break, then that should be the cue to start paying attention and forming a plan to go long, especially if U.S. data comes in weak. This is against the longer-term trend lower though, so it’s probably a good idea to keep this as a short-term play and/or have a tight exit strategy.

For the bears, a downside break works more in your favor given the longer-term trend and the overall risk aversion sentiment that has risen this week. if NZ data disappoints and the market breaks lower, this could be a high probability signal of a fresh leg lower, setting up for either a short-term or longer-term short position depending on your trading style.