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With price action consolidation in NZD/USD, will the upcoming GDP update from New Zealand spark a breakout opportunity?

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on GBP/CAD ahead of U.K. CPI data, so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12358.61 +0.35%
FTSE: 6257.00 +0.23%
S&P 500: 3119.73 -0.16%
DJIA: 26223.18 -0.25%
US 10-yr 0.73% -0.024
Bund 10-YR -0.441% -0.019
UK 10-YR: 0.179% -0.029
JPN 10-YR: 0.183% -0.025
Oil: 37.56 -2.14%
Gold: 1731.00 -0.31%
Bitcoin:9407.96 -1.17%
Ethereum: 231.45 -1.53%

Fresh Market Headlines & Economic Data:

U.S. Homebuyer mortgage demand spikes to 11-year high, as rates hit another record low

Biden opens 13-point advantage as Trump popularity drops to seven-month low

Canadian Consumer Price Index (CPI) fell 0.4% on a year-over-year basis in May, down from a 0.2% decline in April.

Canadian home prices rise in May but cracks appear in underlying data

UK inflation hits four-year low on oil price fall, COVID impact

Germany urges EU to plan for possible ‘no deal 2.0’

OPEC sees gradual oil demand recovery, makes 84% of cuts in May

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

Fed Chair Powell testimony at 4:00 pm GMT
Fed Mester speech at 8:00 pm GMT
New Zealand GDP at 10:45 pm GMT
Australia Employment Change & RBA Bulletin at 1:30 am GMT (June 18)

What to Watch: NZD/USD

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

We’ve got a potential pickup in volatility for the Kiwi with the latest read of economic health for New Zealand. The first quarter GDP read on New Zealand will be coming in the early Asia session, and it tends to be a short-term market mover for the New Zealand dollar, especially since we only get to see it every three months.

That makes the price consolidation seen in the one hour chart above of NZD/USD a candidate for a potential breakout setup to watch out for.

Over the past two sessions, the market seems to have gravitated around the 0.6450 minor psychological handle, forming a pattern of lower ‘highs’ and higher ‘lows’, i.e. a symmetrical triangle.

The setup to watch out for around the event is for a break outside of the symmetrical triangle, and if that break is based on a big surprise in the GDP read (expectations are for a -1.0% fall), then momentum can pick up quickly.

If the market breaks higher, watch the double top area around 0.6550 – 0.6600 as a potential resistance area, and to the downside, the previous swing low around 0.6350 is a potential support area. Both areas are within the daily ATR of around 80 – 85 pips, so reachable within a session or two.

If the number is pretty much in line with expectations, any break may not have enough legs for a strong move, so keep that in mind, especially when setting exit points!