Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on AUD/JPY after the RBA kept rates the same, so be sure to check that out to see if there is still a potential play!
|Equity Markets||Bond Yields||Commodities & Crypto|
DAX: 12603.51 -0.34%
FTSE: 6028.68 -0.07%
S&P 500: 3298.07 +0.10%
DJIA: 26709.30 +0.17%
US 10-YR: 0.517% -0.046
Bund 10-YR: -0.558% -0.036
UK 10-YR: 0.067% -0.033
JPN 10-YR: 0.024% +0.01
Oil: 40.97 -0.10%
Gold: 1,999.90 +0.68%
Bitcoin: 11,190.00 -0.48%
Ethereum: 388.51 +0.94%
Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar for U.S. & Asia:
API Crude oil stock change at 8:30 pm GMT
New Zealand Employment Change at 10:45 pm GMT
Australia Services PMI at 11:00 pm GMT
Japan Services PMI at 12:30 am GMT (Aug. 5)
Australia Home Loans & RBA Chart Pack at 1:30 am GMT (Aug. 5)
China Services PMI at 1:45 am GMT (Aug. 5)
What to Watch: AUD/NZD
Looking at the economic calendar, we’ve got potential catalysts for both the Australian dollar and New Zealand dollar coming in the Asia session that will likely get traders to pay attention to AUD/NZD.
The quarterly employment update from New Zealand is the most notable of the bunch, with expectations of a rise in the unemployment rate to 5.8% vs. 4.2% in the previous quarter. The Australian services PMI and home loans data aren’t likely to shake up the Aussie much, but they’re something to watch out for in case we see reads far from expectations.
Technically, this pair has been in a longer-term uptrend in July, slowly grinding higher since bottoming out around 1.0560, and more recently, starting to break above a short-term consolidation pattern between 1.0730 – 1.0800. This could draw in technical trend traders to potentially play the trend higher if volatility picks up.
For the bulls on AUD/NZD, watch out for is better-than-expected Australian data vs. weak New Zealand jobs data, which would likely fundamentally support this pair higher. In this scenario, longing after a pullback to the 1.0800 is a conservative entry strategy to consider, but since the pair is already starting to break higher, don’t rule out an “at market” entry if the momentum picks up.
For the bears on AUD/NZD, weak Aussie data and a strong NZ jobs update may draw in AUD/NZD sellers, but don’t consider a short position unless we’re seeing a test-and-reversal of the 1.0850 area (the post-pandemic highs for AUD/NZD) and/or a break below the bottom of the consolidation area around 1.0750.