Australia is about to print its latest labor market numbers!
Will the report support the Reserve Bank of Australia (RBA)’s decision to pause its tightening plans?
Before moving on, ICYMI, yesterday’s watchlist checked out NZD/USD’s short-term downtrend and looked at the next possible support zone amidst higher interest rate expectations for the Fed. 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:
The IMF sees global growth at 2.8% in 2023 and 3.0% in 2024, slightly lower than its January forecasts. Global growth is also seen at 3.0% five years from now, its lowest medium-term forecast since 1990.
In an interview, FOMC member John Williams said that one more rate hike followed by a pause is a “reasonable starting place” though the Fed’s path will depend on economic data.
In a news conference, U.S. Treasury Secretary Yellen said that the U.S. economy is performing “exceptionally well,” and that she’s “not anticipating a downturn in the economy” despite concerns over global banking, Russia’s war against Ukraine, and a recession.
Japan’s bank lending up by 3.0% y/y in March, lower than February’s 3.3% uptick but higher than the expected 1.8% increase.
Japan’s core machinery orders fell by 4.5% m/m in February after a 9.8% jump in January.
Japan’s producer prices up by 7.2% y/y in March, smaller than February’s 8.3% increase, as energy cost inflation slowed.
New Zealand’s credit card spending improved from -0.1% to 0.7% m/m in March
Swiss parliament’s lower house rejects Credit Suisse rescue package. The vote is mostly symbolic, however, as the state has committed the funds and lawmakers cannot overturn that decision.
Price Action News
Overlay of AUD Pairs 15-minOverlay of AUD Pairs 15-min
A lack of top-tier economic releases and caution ahead of today’s U.S. CPI release kept most of the major currencies in tight ranges today.
AUD and NZD saw a little bit more volatility though, when a bit of risk-taking pushed them higher during the late Asian session trading.
Both commodity-related currencies eventually gave up their intraday gains and are now trading close to their daily open prices.
One possible explanation is that traders are really staying in the sidelines ahead of the U.S. CPI and FOMC meeting minutes reports that could make or break speculations of more tightening from the Fed.
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. CPI reports at 12:30 pm GMT
BOE Governor Bailey to give a speech at 1:00 pm GMT
BOC’s policy decision at 2:00 pm GMT
EIA crude oil inventories at 2:30 pm GMT
BOC’s presser at 3:00 pm GMT
FOMC meeting minutes at 6:00 pm GMT
Australia’s MI inflation expectations at 1:00 am GMT (Apr 13)
Australia’s labor market data at 1:30 am GMT (Apr 13)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
AUD/NZD: 15-minute
USD volatility and price action will likely be cray in the next trading sessions so I thought I should take a closer look at AUD/NZD instead.
The pair has been in an uptrend since last week when it found support from the 1.0600 major psychological handle.
Can the pair keep up its upswing?
AUD/NZD’s current prices are not too far from the 1.0800 psychological level that has been serving as support since March.
As you can see, 1.0800 right around the R1 of today’s Standard Pivot Points.
If Australia’s labor market reports come in stronger than markets are expecting, then AUD could shoot up to the R1 or R2 zone.
But if traders dump risk assets like AUD faster than NZD, or if Australia’s jobs numbers support a longer tightening pause from the RBA, then AUD could dip back down to its daily open prices.
It could even see deeper retracements before AUD buyers jump back in!
What do you think?
