The FOMC’s decision and a few Chinese reports ahead got me looking at NZD/USD today!
Think we’ll see a breakout in the next trading sessions?
Before moving on, ICYMI, yesterday’s watchlist checked out USD/CAD’s descending triangle consolidation ahead of the U.S. CPI release. 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. CPI for May: 4.0% y/y (4.3% y/y forecast) vs. 4.9% y/y previous; Core CPI lower from 5.5% y/y to 5.3% y/y
In a speech before the House of Lords Economics Affairs Committee, BOE Gov. Bailey said that “we’ve got a very tight labour market” and that the slowdown of inflation is “taking a lot longer than expected.”
China’s National Development and Reform Commission (NDRC) cut the retail gasoline and diesel prices for a sixth time this year.
API: Crude oil inventories in the U.S. rose by 1.024 million barrels for the June 9 week instead of declining as expected
Food prices – which makes up 19% of New Zealand’s CPI – rose by 0.3% m/m (12.1% y/y) in May
New Zealand annual current account deficit unexpectedly narrows from 9.0% to 8.5% of GDP in Q1 2023
U.K.’s GDP returns to growth with 0.2% m/m uptick in April (from -0.3% in March) thanks to higher consumer spending and fewer labor strikes
U.K.’s industrial production down by 0.3% m/m in April vs. -0.1% expected, -0.7% in March
Eurozone’s industrial production rebounded by 1.0% m/m in April after a 2.6% drop in March
Price Action News
There were a couple of data releases during the Asian session, but traders mostly focused on the upcoming FOMC statement.
Specifically, a lot of traders priced in the Fed pausing AND possibly turning less hawkish later today especially after yesterday’s weaker-than-expected U.S. headline inflation data.
USD stayed within its late U.S. session ranges until near the European session open when it lost pips and made new intraday lows against its major counterparts.
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. PPI reports at 12:30 pm GMT
FOMC statement at 6:00 pm GMT
New Zealand’s GDP at 10:45 pm GMT
Japan’s core machinery orders at 11:50 pm GMT
Australia’s labor market data at 1:30 am GMT (June 15)
China’s data dump at 2:00 am GMT (June 15)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
NZD/USD: 15-min
As mentioned above, a wave of anti-dollar sentiment dragged on the safe haven and pushed its major counterparts higher near the start of European session trading.
NZD/USD, which was chillin’ near a trend line support, jumped up to the .6170 zone near its June highs.
Are we looking at an upside breakout in the making?
Take note that NZD/USD’s current levels already place the pair halfway through NZD/USD’s daily average volatility.
Not only that, but Stochastic is also showing an “overbought” signal on the 15-minute time frame.
An upside breakout opens the pair to a move up to the R1 (.6180) of today’s Standard Pivot Points.
We could see more NZD/USD buying if the Fed fails to sound hawkish enough for the markets, or if China’s data dump tonight encourages risk-taking.
But if NZD sellers jump in ahead of the actual FOMC event, then NZD/USD could pull back down to its trend line levels before either extending or breaking its uptrend.
