Daily U.S. Session Watchlist: AUD/NZD

Volatility picked up for AUD/NZD in today’s session, and we could see more of the same with Australian and New Zealand economic updates coming soon.

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on a bearish pullback on GBP/NZD, so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

Fresh Market Headlines & Economic Data:

U.S. weekly jobless claims total 1.416 million, vs 1.3 million expected

No stopgap to preserve $600 jobless benefit add-on, White House’s Meadows says

German GfK consumer climate forecast has a figure of -0.3 points for August 2020, 9 points higher than its level in July (revised to -9.4 points).

UK manufacturers report weak orders, more upbeat on outlook – CBI

EU parliament to push for tweaks in recovery plan, long-term budget

EU’s Barnier Says UK Position Makes Trade Deal ‘Unlikely’

Bank of England’s Haskel worried about slow recovery

Bank of England promises action to boost long-term investment

Mnuchin says GOP plan for unemployment extension will be based on ’70% wage replacement’

The Conference Board Leading Economic Index for the U.S.: +2.0% in June to 102.0, following a 3.2% increase in May and a 6.3% decrease in April.

China state-owned firms’ first half profits down 38.8% year-on-year: ministry

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

New Zealand Trade Balance at 10:45 pm GMT
Australia Manufacturing & Services PMI at 11:00 pm GMT
U.K. Consumer Confidence at 11:01 pm GMT

What to Watch: AUD/NZD

On the one hour chart above of AUD/NZD, we’ve got a pattern of higher ‘highs’ and ‘lows’ forming, with the most recent buying support forming around a broken resistance area (1.0690 -1.0700). We can also see that the stochastic indicator is signaling a potential oversold market short-term, which could draw in more technical traders into the fast forming uptrend.

Ahead, we’ve got potential volatility and directional catalysts for AUD/NZD in the form of trade data from New Zealand and business sentiment data from Australia in the upcoming Asia session.

For the bulls on AUD/NZD, if broad risk sentiment stays risk-off and/or we see positive Australian data vs. negative New Zealand data, watch out for that 1.0700 major psychological level to hold before considering a long position.

With a daily ATR of around 50 pips and a tight stop just beyond the rising trendline/major psychological level, a good potential short-term return-on-risk is possible if targeting just the next minor psychological level.

For the bears on AUD/NZD, positive New Zealand data vs. negative Australian data could take the pair lower, especially if the Australian data really disappoints. In this scenario, watch for a break below the rising trendline / major psychological area before considering a short position.

From these levels, the minor support area around 1.0650 will likely draw in buyers again, still a decent potential return-on-risk for a day trade or short-term swing trade.