NZD/CAD is clawing its way back up after yesterday’s downswing!
I’m checkin’ out the 15-min chart for opportunities to extend the pair’s longer-term trend.
Before moving on, ICYMI, yesterday’s watchlist checked out AUD/CAD’s triangle consolidation ahead of BOC’s policy announcement. 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:
BOC surprised on Wednesday with a 25-bps interest rate hike to 4.75%; no explicit guidance given on next moves
EIA: US crude inventories surprisingly fell by 451K barrels in the week to June 2 as refiners cranked out fuel to the highest level since 2019 during the Memorial Day holiday
RICS U.K. house price balance rose from -39 to -30 and reflected less price falls in May
New Zealand’s manufacturing sales volumes fell by 2.1% q/q in Q1 after Q4’s 4.6% downtick
Japan’s overall bank lending accelerated from 3.2% to 3.4% y/y (vs. 3.1% expected) in May
Japan’s final GDP revised sharply higher from 1.9% to 2.7% y/y in Q1 2023 on upward revisions to capital spending and private and domestic demand
China’s biggest state banks cut their deposit rates, which would help set the stage for PBoC reducing its other interest rates
Australia’s trade surplus narrowed from 14.2B AUD to 11.15B AUD in April as lower exports (-5.0%) reflected weaker commodity and Chinese demand
Japan’s Economy Watchers survey improved from 54.6 to 55.0 in May thanks to higher retail and services activities
Price Action News
Overlay of NZD Pairs 15-min
The U.S. dollar struggled to maintain its gains from the previous session, which probably contributed to the pro-risk, anti-USD sentiment that we saw during the Asian session.
There were no direct catalysts involved in NZD’s sharp upswings but it might have helped that China’s largest state banks cut their interest rates and improved overall risk sentiment.
NZD rose against ALL of its major counterparts. It gained the most pips against safe havens like USD, JPY, and CHF and gained the least against CAD and GBP.
Eurozone’s revised GDP at 9:00 am GMT
SNB Chairman Jordan to give a speeech at 12:05 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
China’s CPI and PPI reports at 1:30 am GMT (June 9)
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NZD/CAD 15-min Forex Chart by TV
Rate hike who?
Yesterday’s BOC rate hike might have dragged NZD/CAD to new monthly lows but it looks like the pair is ready to claw its way back up!
I’m looking at the .8130 zone to see if the current upswing meets enough sellers in the area.
As you can see, .8130 is right around this week’s broken support zone, 61.8% Fib retracement, and the R1 (.8130) of today’s Standard Pivot Points.
Of course, it’s also possible that NZD/CAD can only rise up to today’s Pivot Point (.8100) before extending its weeks-long downtrend.
After all, .8105 is the halfway mark of NZD/CAD’s daily volatility.
If NZD/CAD starts turning lower at current levels, then you should be ready for a potential retest of the .8070 lows.
But if you see NZD/CAD gunning for higher resistance zones near .8130, then you can consider trading with the upswing until it meets considerable resistance or selling at the higher resistance levels.
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