There are not a lot of top-tier reports scheduled during the U.S. session, which leads me to believe that traders will set their sights on the upcoming Reserve Bank of New Zealand (RBNZ) statement.
Will speculations and the actual RBNZ event drag NZD/JPY in the next trading sessions?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at EUR/GBP’s upswing to see if it gains traction when key economic data are released. 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:
- Fed’s George says doesn’t dismiss risk of inflation surge
- BoE’s Bailey sees little long-term impact from inflation spike
- UK refuses to back Biden push for minimum corporation tax – The Telegraph
- BOC Gov Macklem says tapering is right move for economy – WSJ
- Sentiment among German managers has “improved considerably” in May
- UK borrowing shows first annual fall since start of pandemic
- Oil steady near one week high as prospect of Iran glut wanes
- Fed balm lifts shares to record high amid tussle over yuan
- Dollar hits fresh 4-1/2 month lows as Fed speakers soothe inflation fears
Upcoming Potential Catalysts on the Economic Calendar:
- Germany’s IfO business climate at 8:00 am GMT
- U.K.’s CBI realized sales at 10:00 am GMT
- Fed’s Evans to give a speech at 11:40 am GMT
- U.S. CB consumer confidence at 2:00 pm GMT
- U.S. new home sales at 2:00 pm GMT
What to Watch: NZD/JPY
NZD/JPY 1-hour Forex Chart
In case you missed it, NZD/JPY broke below a trend line support last week. It’s now retesting the broken trend line that’s near the 200 SMA on the 1-hour time frame.
Will the RBNZ’s event extend NZD/JPY’s downswing this week?
While the central bank isn’t expecting to make any policy changes in June, word around is that we could hear talks of tapering asset purchases and/or factoring higher interest rates in the members’ projections.
NZD/JPY’s intraweek trend might also depend on overall risk sentiment. See, a couple of FOMC members have assured us this week that they’re not considering removing their easy policies anytime soon.
If the risk-friendly environment extends to the late U.S. and early Asian session, then NZD/JPY can make higher lows and break its downtrend on the 1-hour.
But if the RBNZ stays away from any tapering or tightening talk, or if we see economic updates that discourage risk-taking, then NZD/JPY may extend its downswing and make new May lows.
