Who else is looking at NZD/USD ahead of the RBNZ’s decision?
If you are, then you’ll want to see this 1-hour setup before the event!
Before moving on, ICYMI, yesterday’s watchlist looked at NZD/CAD’s short-term range resistance ahead of the U.S. session. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. New Home Sales for October fell -5.6% to 680K units (-4.0% m/m forecast; 8.6% m/m previous)
Dallas Fed Manufacturing Index for November: -19.9 (-17 forecast; -19.2 previous)
In a panel discussion, RBA Gov. Bullock noted that they’re still committed to bringing down inflation but also be careful about “not imposing on the economy too much and raising the unemployment rate” too high
U.K.’s BRC shop price index showed inflation in U.K. shops falling weakening from 5.2% y/y to 4.3% y/y in November, the lowest since June 2022
Australia’s retail sales for October: -0.2% m/m (0.1% m/m forecast, 0.9% previous)
BOJ’s core CPI for October: 3.0% y/y (3.4% y/y forecast and previous)
German GfK consumer climate for November: -27.8 (-28.2 forecast, -28.3 previous)
Price Action News
The New Zealand dollar was once again one of the biggest movers in Asia and early European session trading, and this time it’s to the downside.
New Zealand didn’t print top-tier economic reports but it probably didn’t help that Australia printed a weaker-than-expected retail sales data while Beijing’s stock exchange index dropped by 4.2%, the steepest drop since the index was created in November 2022.
And then there’s the upcoming Reserve Bank of New Zealand (RBNZ) decision where the central bank is expected to keep its policies unchanged for another month.
NZD is trading the lowest against CAD and AUD but it’s almost (but not quite) in the green against CHF and JPY.
Upcoming Potential Catalysts on the Economic Calendar:
U.S. S&P house price index at 2:00 pm GMT
U.S. CB consumer confidence at 3:00 pm GMT
FOMC member Austan Goolsbee to give a speech at 3:00 pm GMT
FOMC member Christopher Waller to give a speech at 3:05 pm GMT
ECB President Lagarde to give a pre-recorded speech at 4:00 pm GMT
FOMC member Jonathan Haskel to give a speech at 5:00 pm GMT
FOMC member Barr to give speeches at 6:05 pm GMT and 8:30 pm GMT
Australia’s quarterly CPI at 12:30 am GMT (Nov 29)
Australia’s quarterly construction work done at 12:30 am GMT (Nov 29)
RBNZ’s policy decision at 1:00 am GMT (Nov 29)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
NZD/USD has been in an observable uptrend since late last week after the pair bounced from the .6000 major psychological level.
NZD/USD more recently turned higher from the .6080 mark, which is right smack at the trend line support in the 15-minute time frame. The level is also near the 200 SMA and the Pivot Point (.6090) line.
Can the pair extend its gains today?
Take note that the RBNZ is more likely to keep its interest rates unchanged for another month. However, it’s also likely that the move is already priced in. The RBNZ is also publishing its quarterly statement along with this month’s decision, so the odds of a “hawkish pause” is…not zero.
A buy-the-news situation, or even just continued USD-selling could draw in enough buyers to extend NZD/USD. If we do see NZD strength and USD weakness, the .6110 previous high may attract a lot of short-term profit-takers as it’s also near the R1 (.6120) Pivot Point level.
If you don’t feel like taking advantage of NZD/USD’s ascending channel and 200 SMA support bounce, then you can also consider trading the setup after the RBNZ decision.
Just make sure that you know what NZD/USD’s average volatility is and that you follow your trading plan when implementing your trade ideas!
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