New Zealand is about to print its quarterly inflation data!
How will the release affect NZD/CAD’s downtrend?
Before moving on, ICYMI, yesterday’s watchlist checked out a possible resistance for AUD/CAD after this week’s sharp upswing. 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:
Canada’s headline inflation slowed down from 5.2% to a 19-month low of 4.3% y/y in March, supporting BOC’s interest rate hike pause.
In a testimony at the House of Commons finance committee, BOC Gov. Macklem said he’s “encouraged” by slower inflation but emphasized the “importance of staying the course and restoring price stability.”
U.S. Housing Starts for March: -0.8% m/m to 1.42M (1.3M forecast) vs. 1.43M in February; Building Permits fell by -8.8% m/m (-6.0% forecast) vs. 1.55M permits in February
St. Louis Fed President James Bullard says he doesn’t see a recession in six months, favors interest rates in the 5.50% and 5.75% range.
Atlanta Fed President Raphael Bostic believes “One more move should be enough for us” holding interest rates above 5% “for quite some time.”
U.K.’s inflation surprises to the upside, up by 10.1% y/y in March vs. 9.8% expected and 10.4% in February, as households continue to deal with high food and energy bills.
Price Action News
Overlay of GBP Pairs 15-min
The U.S. dollar continued to find support during the Asian session as more traders priced in hawkish statements from Fed members Bullard and Bostic. The rest of the major currencies remained in tight ranges, however.
It wasn’t until the U.K. published its higher-than-expected CPI report at the start of London session trading that we saw increased volatility.
The sticky inflation, combined with a strong labor market report from earlier this week, encouraged hawkish (read: pro-GBP) sentiments in the markets. The pound shot higher across the board and is seeing minimal intraday pullback so far.
Eurozone’s final CPI at 9:00 am GMT
Canada’s housing starts at 12:15 pm GMT
US crude oil inventories at 2:30 pm GMT
US Beige Book report at 6:00 pm GMT
New Zealand’s quarterly CPI at 10:45 pm GMT
FOMC member John Williams to give a speech at 11:00 pm GMT
Japan’s trade balance at 11:50 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
NZD/CAD 15-min Forex Chart by TradingView
April has NOT been a good month for NZD/CAD, which has been in an observable downtrend since finding resistance at the .8560 levels.
The pair is now consolidating at the .8300 area that served as support for most of last week. It’s also where you can find the pivot point of today’s Standard Pivot Points.
New Zealand’s CPI release could help NZD/CAD find its next direction. Analysts see consumer price increases speeding up from 1.4% to 1.5% in Q1 2023, which supports RBNZ’s decision to raise its rates by 50bps while other central banks are talking pauses.
If New Zealand’s inflation surprises to the upside, NZD/CAD could find support at the .8300 psychological level and target R1 (.8330) or the 50% Fib retracement (.8345).
Meanwhile, a downside surprise could encourage rate hike pause talks for the RBNZ. NZD/CAD could break below today’s consolidation and dip towards its weekly lows near .8270.
Comments are closed.