The yen is off to a pretty strong start this week!
Can the yen extend its rally against the Kiwi when New Zealand prints its latest trade balance?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
UBS to acquire Credit Suisse for 3 billion CHF through Swiss government-brokered deal, which includes 9 billion CHF gov’t guarantee and 10 billion CHF liquidity assistance
Major central banks like Fed, ECB, BOJ, BOE, SNB and BOC switch from weekly to daily auctions of U.S. dollars through swap lines, a coordinated move typically made during financial crises
Joint statement from Fed head Powell and Treasury Secretary Yellen welcome announcements by Swiss gov’t to support financial stability and assure that the U.S. financial system remains resilient
Japanese coast guard reports that North Korea fired another ballistic missile
RBA official Kent: Australian banks are undeniably strong, but central bank will take account of financial conditions when it comes to policy adjustments
Banking shares remain under pressure on FINMA orders that Additional Tier 1 (AT1) debt will be written down to zero, sparking contagion worries
U.K. house prices up by 0.8% m/m in March vs. previous flat reading, according to Rightmove
German producer prices dipped by 0.3% m/m in February vs. estimated 1.3% slump and previous 1.0% drop
Price Action News
The lower-yielding Japanese currency was the safe-haven of choice early on, as news of Credit Suisse’s acquisition and AT1 debt writedown sparked contagion woes among banks.
Market players also seemed wary of the dollar ahead of the FOMC decision later this week, with some predicting that the Fed could scale back its tightening plans from a 0.50% to 0.25% hike or maybe no increase at all.
Words of reassurance from Powell and Yellen didn’t seem to spark much confidence in the markets, given the joint effort of major central banks to shore up liquidity.
Upcoming Potential Catalysts on the Forex Economic Calendar:
New Zealand trade balance 9:45 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
NZD/JPY: 15-minute
This pair has been in selloff mode from the get-go, as risk-off flows weighed heavily on the higher-yielding Kiwi while favoring the Japanese yen.
However, price seems to be finding some buyers at S2 (81.86) of its Standard Pivot Points, and a bounce could spur a quick pullback to nearby resistance levels.
In that case, NZD/JPY could retreat to the area of interest around the previous day lows, 38.2% Fibonacci retracement level and S1 (82.25), which might now hold as a ceiling.
A break below the latest lows, on the other hand, could drag the pair down to the next potential floor at S3 (81.33) or further south.
Note that this pair moves an average of 84.43 pips per day, so keep this range in mind when setting entries and exits!
