Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/NZD ahead of the latest ECB policy meeting minutes, so be sure to check that out to see if there is still a potential play!
|Equity Markets||Bond Yields||Commodities & Crypto|
DAX: 13078.34 +1.16%
FTSE: 5996.32 +0.84%
S&P 500: 3439.70 +0.59%
NASDAQ: 11405.85 +0.36%
US 10-YR: 0.777% -0.008
Bund 10-YR: -0.516% -0.023
UK 10-YR: -0.516% -0.023
JPN 10-YR: +0.029% +0.002
Oil: 40.80 +2.13%
Gold: 1890.00 -0.04%
Bitcoin: 10898.54 +2.24%
Ethereum: 349.53 +2.57%
Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
Fed Barkin speech at 6:30 pm GMT
Fed Kaplan speech at 10:00 pm GMT
Japan Household Spending & Avg. Cash Earnings at 11:30 pm GMT
RBA Financial Stability Review, Home Loans at 12:30 am GMT (Oct. 9)
China Caixin Services PMI at 1:45 am GMT (Oct. 9)
Japan Machine Tool Orders at 6:00 am GMT (Oct. 9)
What to Watch: AUD/NZD
On the one-hour chart above of AUD/NZD, we can see upside momentum picked up over the last two sessions, likely on renewed speculation that the Reserve Bank of New Zealand may increase stimulus measures, including the possibility of negative interest rates.
This brought enough strength in the rally to break above the minor resistance area between 1.0820 – 1.0850, which could draw in fresh buyers in the medium to longer-term if the current negative rates speculation persists and all other things being equal.
But we’re seeing a bearish price pattern form on the chart above in the form of bearish divergence, so we could get a short-term pullback, especially if the upcoming scheduled events from Australia and China spark a bearish reaction.
So for the next session or two, we’re watching for that pullback to retest the broken resistance area around 1.0850. And if the Australian and Chinese data do not disappoint, coupled with an emergence of a bullish reversal pattern from 1.0850 down to 1.0800, then a long position makes sense for a short-term to swing position play.
But if we see disappointing data from Australia and/or China, AND we get surprise comments from RBNZ officials walking back negative interest rate talk, then this move could flip back to the downside, which would likely draw in sellers if the if the market gets below that 1.0820 strong area of interest.