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!
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Fresh Market Headlines & Economic Data:
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.
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.