NZD, one of the strongest currencies last week, is seeing a pullback against the U.S. dollar!
Are we looking at a retracement trade opportunity over here?
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:
China Evergrande Group dropped as much as 24% after the property developer not only postponed a scheduled debt restructuring meeting but also revealed its inability to issue new notes under its current debt restructuring plan
BOJ Gov. Ueda hinted that they’re looking at strong wages and consumption rather than cost pressures from rising import costs for clues on their monetary policy outlook
IfO German business climate index dipped slightly from 85.8 to 85.7; “The German economy appears to have bottomed out”
Price Action News
Currency price action was relatively tight today thanks to a lack of fresh market catalysts.
The Swiss franc saw a more uniform price action, however, when the safe haven dropped across the board at the start of London session trading.
One possible reason for the weakness is the SNB surprising the markets with a rate hike pause last week when traders had penciled in a rate hike. The less hawkish event may be steering today’s European session traders to other assets.
CHF is seeing the most losses against CAD, NZD, and USD but is still up against AUD as of writing.
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.K.’s CBI realized sales at 10:00 am GMT
ECB President Lagarde to share testimony in Brussels at 1:00 pm GMT
FOMC member Kashkari to give a speech at 10:00 pm GMT
Japan’s service provider price index at 11:50 pm GMT
BOJ’s core CPI (y/y) at 5:00 am GMT (Sept 26)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
NZD/USD: 15-min
If you’ve read the latest FX Weekly Recap, then you’ll know that the New Zealand dollar was one of the strongest currencies last week.
But NZD/USD has since seen a pullback. The pair is trading closer to the .5950 area after getting rejected at just under the .6000 mark.
Can NZD/USD reclaim the .6000 area?
As you can see, NZD/USD’s prices are not too far from a resistance zone from the previous weeks. This time around, the 200 SMA may also be keeping some NZD bears from pouncing.
We don’t have a ton of top-tier reports scheduled in the next trading sessions, which means that risk sentiment will likely factor in the major currencies’ price action.
An extension of last week’s themes could push NZD/USD back to its previous highs.
But if traders focus on the Fed’s hawkishness, or if the markets worry about the impact of a high-interest rate environment, then NZD/USD could revisit lower areas of interest before seeing renewed buying pressure.
