NZD/USD is nearing a key intraday resistance zone ahead of Uncle Sam’s GDP release!
Will we see a breakout today?
Before moving on, ICYMI, yesterday’s watchlist checked out AUD/JPY’s post-CPI selloff and looked for the possible areas to short. 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:
CBI’s U.K. retail industry survey improved from +1 in March to +5 in April though retailers don’t expect lasting improvement.
A surge in aircraft orders helped push U.S. durable goods orders 3.2% m/m higher in March but non-defense, new orders dropped more than expected.
U.S. trade deficit in goods narrowed by 8.1% m/m in March as exports surged (+2.9%) and imports declined (-1.0%)
EIA: U.S. crude oil inventories fell by 5.1 million barrels in the week to April 21 vs. 1.5-million barrel drop expected
Germany raised its 2023 growth forecasts from 0.2% to 0.4% on stronger-than-expected manufacturing at the start of the year
Atlanta Federal Reserve’s GDPNow tracker sees U.S. GDP at 1.1% as of April 26 (vs. 2.5% estimates in April 18)
ANZ: New Zealand business confidence largely unchanged with 43.8% (from 43.4%) of respondents expecting the economy to deteriorate as of April.
In a speech, New Zealand Prime Minister Chris Hipkins committed to reducing government spending and promised not to introduce new taxes this year.
Profits of China’s industrial firms fell 21.4% ytd/y in March. In March alone, industrial profits fell 19.2% y/y as recovery remains patchy.
Price Action News
Overlay of NZD Pairs 15-min
With not a lot of top-tier data releases, Asian traders took cues from their U.S. counterparts and priced in their concerns over the U.S. banking sector as well as overall growth.
NZD bulls missed the risk aversion memo, though, thanks in part to New Zealand Prime Minister Chris Hipkins announcing that the government won’t announce new taxes next year.
The bullish news helped propel NZD higher across the board.
Upcoming Potential Catalysts on the Economic Calendar:
U.S. advance GDP at 12:30 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
U.S. pending home sales at 2:00 pm GMT
Tokyo’s core CPI at 11:30 pm GMT
Japan’s preliminary industrial production at 11:50 pm GMT
Japan’s retail sales at 11:50 pm GMT
Australia’s quarterly PPI at 1:30 am GMT (Apr 28)
BOJ’s monetary policy decision out during the Asian session (Apr 28)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
NZD/USD 15-min Forex Chart by TradingView
The combo of dollar weakness and news of no new taxes for New Zealand consumers helped boost NZD/USD firmly above its R1 Pivot Point level (.6140) and closer to the R2 zone (.6160).
Thing is, the Standard Pivot Point‘s R2 lines up with the top of a descending channel that’s been around since last week.
Are we looking at the best place to short NZD/USD for a short-term trade? Or will today’s market events push NZD/USD to an upside breakout?
Uncle Sam is printing its first Q1 2023 GDP reading today and, word around is that we could see weaker numbers compared to Q4 2022.
If today’s headlines result in less hawkish Fed expectations and less demand for the U.S. dollar, then NZD/USD could extend its intraday uptrend and make a play for the .6160 channel resistance.
But if today’s themes revolve around global recession concerns and risk aversion, then NZD/USD may return to its weeks-long downtrend.
NZD/USD could drop to the .6140 R1 level before the buyers step in again.
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