There aren’t a lot of top-tier reports on tap so risk-taking will likely move the major currencies around.
What do you think of NZD/USD extending its short-term downtrend?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist bet on Asian session economic releases to push AUD/JPY all over its range. 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:
- UK BRC retail sales increase in May
- Japan’s GDP shrank less than first reported amid emergency
- Japan service sector sentiment dips in May
- AU business conditions at new record highs in May
- Supply bottlenecks throttle German industrial output in April
- Japan FinMin says G7 clinches ‘historic’ deal on minimum global tax
- Australia, NZ dollars return to range prison after breakout fails
- Asia shares pare gains on caution, oil falls again
Upcoming Potential Catalysts on the Economic Calendar:
- Eurozone ZEW economic sentiment at 9:00 am GMT
- German ZEW economic sentiment at 9:00 am GMT
- Eurozone’s revised GDP report at 9:00 am GMT
- Canada’s trade balance at 12:30 am GMT
- U.S. trade balance at 12:30 am GMT
What to Watch: NZD/USD
NZD/USD just got rejected around the .7240 levels, which lines up with an inflection point that bulls and bears have been respecting since late April.I’m eyeing the setup today because there aren’t a lot of top-tier economic data scheduled in the next couple of hours. This means that traders could focus on risk sentiment or this week’s closely-watched events like the Bank of Canada (BOC) statement, European Central Bank (ECB) statement, or the U.S. CPI release.
If traders focus on expectations of hot CPI numbers in the U.S. and the increased pressure the Fed would have to taper its easy policies soon, then the U.S. dollar could gain more pips on the Kiwi and drag NZD/USD down to the .7140 key support level.
But if markets price in tightening or tapering speculations from the BOC and ECB events, then we could see risk-taking that might lift NZD/USD above the SMAs and its trend line resistance.