Not much on the calendar to likely spark big moves, so we’re checking out this downtrend in NZD/CHF for a potential short-term play.
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on NZD/JPY as coronavirus fears continue to rise, so be sure to check that out to see if there is still a potential play!
|Equity Markets||Bond Yields||Commodities & Crypto|
|DAX: 12771.49 -0.15%
FTSE: 7014.30 -0.05%
S&P 500: 3173.80 +1.42%
DJIA: 27454.34 +1.38%
|US 10-yr 1.357% +0.027
Bund 10-YR -0.489% +0.023
UK 10-YR: 0.522% +0.002
JPN 10-YR: -0.083% +0.014
|Oil: 49.95 +0.10%
Gold: 1639.30 -0.65%
Bitcoin: 9000.00 -3.70%
Etherium: 227.88 -8.45%
Fresh Market Headlines & Economic Data:
- New coronavirus cases outside China exceeded those in China for the first time, WHO says
- US new home sales surge to 12.5-year high in January
- U.S. crude drops below $50 as virus spreads in Middle East and Europe
- Fed’s Kaplan says unclear right now if coronavirus calls for U.S. rate change
- Too early for the ECB to contemplate coronavirus response: Makhlouf
- Euro zone governments should use budget measures to support growth: Lagarde
- UK can’t have EU market access without fair competition guarantees: Barnier
Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:
- Fed Kashkari speech at 6:00 pm GMT
- U.S. President Trump speech at 11:00 pm GMT
- Australia Private capital expenditure at 12:30 am GMT (Feb. 27)
- Bank of Japan Kataoka speech at 1:30 am GMT (Feb. 27)
- Bank of Japan Amamiya speech at 5:00 am GMT (Feb. 27)
What to Watch: NZD/CHF
Today, we’re going with mostly a technical setup as the forex calendar is light on potential catalysts. I say “mostly” as we are looking to go with the main driving theme of the Coronavirus story, which continues to spread outside of China at an accelerated pace. So, it’s risk-off vibes for now, which plays well with this downtrend in NZD/CHF, as seen in the one hour chart above.
This pair has been in sell mode going back to February 14, but we’ve got a little bounce going on, likely rolling with some risk-on moves in the financial markets as traders attempt to bounce from the massive recent risk-off move. If NZD/CHF gets up a bit higher to the broken minor support area around 0.6180, which is also the Fibonacci retracement area / falling ‘highs’ pattern, then watch out for bearish reversal patterns before considering a short-term sell position on the pair. With a daily ATR of around 45 pips, the potential R:R if targeting the previous swing low is pretty good for a very short-term play and reachable within a session or two.
For the bulls, a break above the falling ‘highs’ pattern may make a long position interesting IF we get a positive turn of events by the upcoming Asian session rolls around. That’s a low probability scenario, but if we do get something (e.g., Coronavirus vaccine, more stimulus from governments/central banks), then a hold above 0.6180 and bullish patterns does raise the probability of a continued move higher.