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Checking out AUD/NZD today as the pair pulls back from its recent trek higher. Will the upcoming Australian economic data keep the party going for the bulls?

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/USD ahead of the ECB decision, so be sure to check that out to see if there is still a potential play!

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Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:

  • Australia Ai Group Manufacturing Index at 10:30 pm GMT
  • Australia CommBank Manufacturing PMI at 11:00 pm GMT
  • Japan Tokyo CPI at 11:30 pm GMT
  • BOJ Monetary policy meeting minutes at 11:50 pm GMT
  • Australia New Home sales at 12:00 am GMT (May 1)
  • Australia PPI at 1:30 am GMT (May 1)

What to Watch: AUD/NZD

AUD/NZD 1-Hour Forex Chart
AUD/NZD 1-Hour Forex Chart

The Australian dollar has a busy calendar coming up with updates on business sentiment, new home sales, and producer prices.

These are mid-tier reports so they’re not likely to spark huge moves, but if the data is pretty far off from expectations and/or previous reads, then we may see decent moves for the Aussie.

If that’s the case, we’re checking AUD/NZD, which has been in a solid uptrend since mid-March, but we’re now seeing a pullback from its recent swing higher from around 1.0500 to 1.0750.

The pair is now retesting a strong area of interest just above 1.0600, and a break from which could draw in momentum players if the upcoming data sparks enough interest.

If you’re a bull on the pair to play the longer-term trend and a potential round of positive economic updates, then bullish candle patterns from this area down to 1.0580 is the signal to start putting a long position together.

This is the higher probability trade at the moment given the current environment and likelihood the pullback is overdone according to stochastic.

If you’re a bear on the pair, a break below 1.0580 on weak Australian economic updates is a scenario that may draw in short-term momentum players.

When using daily ATR of around 80 pips as a stop guide and targeting the next support area around 1.0500 gives a strong short-term potential return-on-risk or even set up for a longer-term position given that AUD/NZD is near its 2019 highs around 1.0800.