The Aussie will likely remain a mover for the rest of the session with more Aussie data ahead, making this support retest on AUD/NZD one to watch for potential short-term pips.
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on AUD/USD after the latest RBA monetary policy statement, 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
Fed Harker speech at 4:00 pm GMT
API Crude Oil stock change at 8:30 pm GMT
Australia Services Index at 9:30 pm GMT
Fed Kaplan speech at 10:00 pm GMT
Reserve Bank of Australia Chart pack at 12:30 am GMT (Oct. 7)
Japan Leading Index at 5:00 am GMT (Oct. 7)
What to Watch: AUD/NZD
On the one-hour chart above of AUD/NZD, we can see a swift move lower in today’s session, likely a reaction to the latest the record budget deficit in Australia, which will likely remain to help support the economy. This brought the pair to a strong support area, that’s brought in buyers over the past week.
The question now is whether or not this is the time for the bears to push past the support area, or will the bulls once again take charge and push the pair higher?
Well, the upcoming Australia Services index and RBA chart pack may be catalysts to determine the next move, but it’s likely they won’t be much of a factor and that the will continue its current trend if there are no new surprises.
For the bears on AUD/NZD, the odds are in your favor at the moment, but with the support area being tested, it’s probably a good idea to wait for a break of the support, or for a bounce up to the falling ‘highs’ pattern before considering a short position.
For the bulls, if you think the upcoming Aussie data will surprise positive, then now is your chance to build a short-term long position. But with the current trend in favor of the bears, it’s probably a good idea to keep position sizing small, especially given the fact that you don’t have much upside potential with those falling ‘highs.’