I’m looking at another Kiwi play today, as this technical setup is too hard to ignore.
Do you think this area of interest would hold?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at AUD/JPY’s test of resistance based on changes in risk sentiment. Be sure to check that out to see if there is still a potential play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- OPEC-JMMC panel says uncertainties limit oil price recovery
- Asian shares on shaky ground, as traders fret about bond market rout
- Chinese official manufacturing PMI up from 50.6 to 51.9 vs. 51.3 forecast
- Chinese official non-manu PMI up from 51.4 to 56.3 vs. 51.9 forecast
- U.K. BRC price shop index down by another 2.4% in March
- Japanese industrial production slumped by 2.1% in Feb vs. projected 1.3% dip
- New Zealand ANZ business confidence index down from 0.0 to -4.1
Upcoming Potential Catalysts on the Economic Calendar:
- U.K. final GDP for Q4 2020, current account balance, and Nationwide HPI at 7:00 am GMT
- French consumer spending and preliminary CPI at 7:45 am GMT
- German unemployment change at 8:55 am GMT
- Eurozone flash CPI estimates at 10:00 am GMT
- ADP non-farm employment change at 1:15 am GMT
- Canadian GDP at 1:30 am GMT
What to Watch: NZD/JPY
This pair is hanging out at an area of interest, which happens to coincide with the 50% Fibonacci retracement level.
Will Kiwi bears return from here?Technical indicators are giving mixed signals, with the moving averages possibly attempting a bullish crossover and Stochastic reflecting exhaustion among buyers.
Turning lower would signal that sellers could still take the upper hand and push NZD/JPY back to the swing low.
Earlier today, New Zealand printed a downbeat ANZ business confidence index, which slumped from 0.0 to -4.1 this month. This level of pessimism reveals that the economy isn’t out of the woods just yet, even with the government’s swift response to the pandemic.
Meanwhile, data from Japan also indicated weak spots, with the industrial production report printing a 2.1% decline and housing starts falling by 3.7%.
These downbeat figures could be enough to keep risk-taking in check for the rest of the day, possibly drawing traders back to safer ground while dumping higher-yielding assets.
Keep in mind that profit-taking could be observed in the next sessions, as traders close the books for the end of the month and quarter.