We’re looking at a comdoll v comdoll battle today as we check out NZD/CAD’s short-term range ahead of Canada’s labor market data.
Will the pair stay within its range today? Or will we see a breakout?
Before moving on, ICYMI, yesterday’s watchlist checked out USD/CAD’s short-term range ahead of Canada’s GDP report and the U.S. core PCE price index release. 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:
U.S. Core PCE Price Index for October: 0.2% m/m (0.3% m/m forecast / previous); Personal spending fell to 0.2% m/m (0.4% m/m forecast; 0.7% m/m previous) & Personal income fell to 0.2% m/m (0.3% forecast; 0.4% m/m previous)
U.S. Weekly Initial Jobless Claims: 218K (213K forecast; 211K previous): Continuing claims rose to 1.927M (1.841M forecast previous)
U.S. Pending Home Sales for October: -1.5% m/m (-2.5% m/m forecast; 1.0% m/m previous)
Canada GDP for Q3 2023: -0.3% q/q (0.0% q/q forecast; 0.3% q/q previous); In September, the monthly change in GDP was 0.1% (0.1% forecast / previous)
Canada’s Average Weekly Earnings for September: 4.0% y/y (4.4% y/y forecast; 3.9% y/y previous)
OPEC+ agreed on Thursday to cut oil output further, approaching 2 million bpd
Japan’s unemployment rate dipped from 2.6% to 2.5% in October
Capital spending by Japanese companies grew by 3.4% in Q3 compared to a year ago and opened the possibility of an upside adjustment to Japan’s GDP
China’s Caixin manufacturing PMI improved from 49.5 to 50.7 in November; “Supply and demand both expanded, prices remained stable, logistics improved, purchasing quantities increased, and manufacturers were more optimistic.”
U.K. Nationwide house price index growth for November: 0.2% m/m (-0.4% m/m forecast, 0.9% m/m previous)
Switzerland’s GDP for Q3 2023: 0.3% q/q (0.1% q/q forecast, -0.1% previous)
Spain’s manufacturing PMI for November: 46.3 (45.6 forecast, 45.1 previous)
Switzerland’s manufacturing PMI for November: 42.1 (42.0 forecast, 40.6 previous)
Price Action News
Overlay of NZD vs. Major Currencies Chart by TradingView
“Risk” assets like the Australian and New Zealand dollars started the day on a strong note following the U.S. core PCE price index supporting “rate cut” bets from the Fed.
The comdolls soon turned lower though. Whether it’s end-of-week profit-taking or traders taking off their risky bets ahead of Powell’s speech, AUD and NZD gave up almost all of their gains against their counterparts.
NZD, in particular, dipped to new intraday lows before trading back in the green. It’s currently gaining the most pips on USD and CHF and is weakest against GBP and AUD.
Upcoming Potential Catalysts on the Economic Calendar:
ECB President Lagarde’s speech at 11:30 am GMT
Canada’s labor market data at 1:30 pm GMT
U.S. final manufacturing PMI at 2:30 pm GMT
U.S. ISM manufacturing PMI at 3:00 pm GMT
Fed Chairman Powell will give speeches at 4:00 pm GMT and 7:00 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
Comdoll traders gather ’round!
NZD and CAD have been battling it out all week as NZD/CAD is kept within a trading range.
The pressure is on for NZD bulls today as NZD/CAD attempts to swing higher after finding support at the .8335 previous lows.
Will today’s Canadian labor market report change the tides for NZD/CAD? The Event Guide for Canada’s October Employment Report suggests a “wait and see” mode and to favor a direct correlation bias.
That is, stronger-than-expected labor reports can bump up CAD and likely push it higher against NZD. On the other hand, a weak report may drag CAD lower.
If Canada’s data release comes in weaker than expected, then NZD/CAD could attract bulls who are already looking for a range support trade.
Look out for a potential bounce from current levels and a retest of the .8360 Pivot Point line if not the .8380 previous highs.
If Canada’s labor data exceeds market estimates, though, or if market trends favor the CAD-related crude oil, then NZD/CAD may extend its recent downswing.
In this case, a downside breakout may be in the cards for NZD/CAD. Look out for a possible dip to the S1 (.8320) Pivot Point line or the .8300 major psychological handle.
What do you think? Which way will NZD/CAD go in the next trading sessions?
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