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AUD/NZD rises up to the top of the watchlist as a busy calendar ahead is likely to bring on a slew of potential setups for traders to take on.

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/USD as it consolidates, 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:

Market rally accelerates as concerns about retail trading frenzy ease, Dow pops 450 points

Flash estimate for Q4 2020 GDP: down by 0.7% in the euro area & by 0.5% in the EU

UK house price growth slows for first time in six months as end of stamp duty holiday looms

In January 2021, French consumer prices increased by 0.6% year on year

Spanish unemployment increased by 76K in January, a lower increase than the same month in 2020

Italian GDP decreased by -2% q/q & by -6.6% over the same quarter of previous year.

Upcoming Potential Catalysts on the Economic Calendar

Fed Williams speech at 7:00 pm GMT
Fed Mester speech at 7:00 pm GMT
Australia Construction index at 9:30 pm GMT
API Crude Oil inventory at 9:30 pm GMT
New Zealand Employment at 9:45 pm GMT
Australia Services PMI at 10:00 pm GMT
Australia Building Permits at 12:30 am GMT (Feb. 3)
Japan Services PMI at 12:30 am GMT (Feb. 3)
RBA Governor Lowe speech at 1:30 am GMT (Feb. 3)
China Services PMI at 1:45 am GMT (Feb. 3)

What to Watch: AUD/NZD

AUD/NZD 1-Hour Forex Chart
AUD/NZD 1-Hour Forex Chart

On the one hour chart of AUD/NZD above, we can see the bears have been in clear control of the pair, going back to mid-January 2020. And bears got an extra boost on the session after the Reserve Bank of Australia surprised traders by extending their quantitative easing program beyond mid-April.

So, it’s likely the Aussie could underperform in the short-term, but with support forming around the 1.0600 handle and stochastic showing potentially oversold conditions, a bounce may be in the cards for AUD/NZD in the next session.

Well, that may all depend on what we get from the forex calendar, which is very busy in the upcoming Asia session for both the Aussie and the Kiwi. Most notable among the group is the latest employment update from New Zealand, with expectations that we’re going to see disappointing reads on both net jobs change and the unemployment rate.

So, if that scenario plays out and Kiwi bears hop in, odds are pretty good we will see a bounce in AUD/NZD. Short-term players will likely have a chance to scalp a rally, but they should be cautious if the market gets back up to the Fib levels / broken support area marked on the chart above. Longer-term players may hop in that area to play the overall trend lower, depending on how bad or good the NZ jobs data may be.

Also be on the look out for a downside break of the 1.0600 handle on surprisingly positive NZ numbers. The move would likely be fast in this scenario as it would support the longer-term trend lower, likely bring traders from all time frames to go with the flow.