New Zealand is about to print its quarterly inflation expectations report!
I’m looking at these nearby inflection points on NZD/USD to see if support levels might hold.
Before moving on, ICYMI, yesterday’s watchlist looked at GBP/USD’s trend line break and retest setup ahead of FOMC speeches. 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:
Japanese average cash earnings up 2.3% y/y vs. 3.0% forecast in June, household spending slumped 4.2% y/y following earlier 4.0% decline
Australia’s Westpac consumer sentiment index fell by 0.4% in July in response to RBA pause, following earlier 2.7% uptick in June
NAB business confidence index improved from downgraded -1 figure in June to +2 in July, reflecting slightly better conditions
Chinese trade surplus rose from $70.6 billion to $80.6 billion in July vs. $70.8 billion forecast, as exports fell 14.5% y/y while imports slipped 12.4% y/y
Japan’s Economy Watchers Sentiment index improved from 53.6 to 54.4 in July vs 54.0 consensus
Price Action News
Aussie pairs spent most of the previous day in consolidation before giving in to bearish vibes in today’s Asian trading session.
China printed a strong trade balance figure, but components of the report revealed that the larger surplus was simply due to steep declines in both export and import activity.
So far, the Chinese government and central bank remain mum on stimulus deets, which is probably why riskier currencies took major hits.
Upcoming Potential Catalysts on the Forex Economic Calendar:
FOMC member Harker’s speech at 12:15 pm GMT
Canada’s trade balance at 12:30 pm GMT
U.S. trade balance at 12:30 pm GMT
Chinese CPI and PPI figures at 1:30 am GMT (Aug. 9)
New Zealand quarterly inflation expectations at 3:00 am GMT (Aug. 9)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
NZD/USD: 15-min
This forex pair is sitting right on a support level that’s been holding so far this month!
Will it break this time?
The Kiwi has a lot to look forward to, as China will be printing its July inflation reports while New Zealand will release its quarterly inflation expectations figure.
The former could report weaker price pressures for the world’s second largest economy and possibly force the Chinese government and central bank to announce fresh stimulus measures.
Meanwhile, an uptick in New Zealand’s inflation expectations reading could revive RBNZ tightening hopes, likely allowing NZD/USD to bounce off the floor.
If that’s the case, the pair could recover to the area of interest at S1 (.6090) which is near the .6100 major psychological mark. A stronger rally could even lift it up to the highs closer to R2 (.6130).
Still, watch out for a steep NZD/USD selloff if the pair happens to break below S3 (.6060) depending on the market reaction to the upcoming top-tier catalysts!
