Crude oil is on the retreat, and this might drag the correlated Loonie lower across the board.
Can NZD/CAD resume its uptrend soon?
Before moving on, ICYMI, yesterday’s watchlist checked out USD/CHF’s channel resistance ahead of PMI releases. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. flash manufacturing and services PMIs beat estimates to show faster growth
U.K. GfK consumer climate index down from -26 to -31 vs. -30 forecast
U.S. President calls for Russia to be expelled from G20
Tokyo core CPI up from 0.5% to 0.8% vs. 0.7% consensus
BOJ Governor Kuroda: Weak yen benefits Japanese economy, watching FX moves carefully
Kuroda: Powerful easing policy to be maintained
Australian gov’t announces more sanctions on Russia and Belarus
U.K. retail sales fell by 0.3% vs. projected 0.6% increase, previous 1.9% gain
Upcoming Potential Catalysts on the Forex Economic Calendar:
German Ifo business climate index at 9:00 am GMT
U.S. revised UoM consumer sentiment index at 2:00 pm GMT
FOMC member Williams’ speech at 2:00 pm GMT
FOMC member Waller’s speech at 2:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: NZD/CAD
The coast is clear in terms of top-tier economic releases in the next trading session, but that doesn’t mean we’re in for a boring one!
I’m looking at big moves in crude oil prices to spot potential trade opportunities on the correlated Loonie, and this NZD/CAD channel is looking like a good setup.
The pair has been trending higher recently, forming higher lows and higher highs inside a rising channel visible on its hourly time frame.
Price is testing the mid-channel area of interest, which happens to coincide with the 50% Fib, 100 SMA dynamic inflection point and former resistance zone.
If it holds as support, NZD/CAD could find its way back up to the swing high or channel top near the .8800 handle. A larger pullback, on the other hand, could dip to the 61.8% level in line with the channel bottom.
Technical indicators seem to be pointing to more gains for this pair, as the 100 SMA is above the 200 SMA while Stochastic is on the move up. However, the oscillator is already approaching the overbought zone to reflect exhaustion among bulls.
Headlines related to Russian sanctions might keep crude oil and Loonie traders on their toes for the rest of the trading day, as tougher measures targeting the energy industry could spark fears of a supply crunch.
