GBP/NZD is on a tear to the down this week on a fundie drivers from Brexit developments and risk sentiment. More sellers ahead on the session?
Intermarket Snapshot
| Equity Markets | Bond Yields | Commodities & Crypto |
| DAX: 11064.72 -1.05% FTSE: 6958.16 +0.24% S&P500: 2684.10 +0.11% DJIA: 24877.07 -0.55% |
US 10-yr 2.656% -0.039 Bund 10-YR 0.162% -0.025 UK 10-YR: 1.225% -0.031 JPN 10-YR: 0.01% +0.01 |
Oil: 54.81 +1.07% Gold: 1328.10 +0.96% Bitcoin: 3406.30 -1.19% Etherium: 105.03 -3.06% |
Fresh Market Headlines & Economic data:
- Trump upbeat on China trade talks but wants to meet Xi to cinch deal
- GDP up by 0.2% in the euro area
- Euro area unemployment at 7.9%
- Jeremy Hunt admits Brexit may be delayed to avoid no deal
- Theresa May considering bid to woo Labour MPs with cash injection for Leave areas
- Japan Industrial Production Dips 0.1% In December
- Energy Slump Drives Canada’s Second GDP Decline in Three Months
- China says its manufacturing activity contracted for the second-straight month in January
- Oil prices steady as US crude heads for best January on record
- Gold eyes 4th month of gains as US Fed pauses rate hikes
- Ripple CEO Sends XRP Soaring, Boosting Bitcoin And Ethereum–Here’s Why
Upcoming Potential Catalysts on the Forex Calendar:
- German Bundesbank’s Weidmann speaks in Frankfurt at 4:00 pm GMT
- BOC Wilkins speaks in Toronto at 5:45 pm GMT
- Australia AIG Manufacturing Index at 9:30pm GMT
- Japan Unemployment Rate at 11:30 pm GMT
- Australia PPI at 12:30 am GMT (Feb. 1)
- Chinese Caixin Manufacturing PMI 1:45 am GMT (Feb. 1)
What to Watch: GBP/NZD
We’ve got our eye on GBP/NZD today, which has seen strong selling pressure on the week and seems to be breaking below a period of consolidation on the one hour chart.
It’s likely the bears came out to play on Sterling after the Brexit deal amendment votes this week didn’t yield a clear path to delaying a “no deal” Brexit outcome. And it’s possible traders have been feeling bullish on the New Zealand dollar on rising global risk sentiment, sparked by yesterday’s FOMC meeting and how the market expects monetary policy to remain easy for the coming year.
With no major expected data points or events coming out for either currency in the next session or two, this momentum may still have legs. And with a daily ATR of around 180 pips, a move to the next potential support area (consolidation area around 1.8850 in early January) is not out of the question, so it’s something to consider for the bears.
For the bulls, a rise above the consolidation area around 1.9000 – 1.9050 and the falling ‘highs’ should be taken into consideration if the market can hold above that area, which is not out of the question given the right catalyst (like a fresh Brexit development), or considering we’re approaching the end of the trading week so traders may think profit taking before the end of Friday.
