RBA’s tapering gave the comdolls a boost earlier today.
Will the momentum be enough to push NZD/USD above a Double Bottom neckline?
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!
Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar:
- Eurozone ZEW economic sentiment at 9:00 am GMT
- Germany’s ZEW economic sentiment at 9:00 am GMT
- Eurozone retail sales at 9:00 am GMT
- U.S. ISM services PMI at 2:00 pm GMT
What to Watch: NZD/USD
In case you missed it, the Reserve Bank of Australia (RBA) tapered its quantitative easing program even as its members emphasized that we probably won’t see any rate hikes until 2024.
Market bulls who were already celebrating New Zealand’s uptick in Q2 2021 business confidence bought the comdolls during the Asian session.
Can the U.S. session traders maintain the momentum? NZD/USD is currently testing a Double Bottom “neckline” that lines up with a mid-range resistance on the 4-hour time frame.
Eyes will be on the dollar as U.S. traders go back to their desks. The U.S. ISM services PMI is up but I have a feeling that markets are already pricing in tomorrow’s FOMC meeting minutes.
If traders price in more hawkish sentiments from the Fed, then we could see the dollar gain pips across the board. NZD/USD could drop back down to its .6950 range support.
But if traders choose to focus on risk-friendly headlines such as the U.K.’s easing restrictions, New Zealand’s improved business outlook, the RBA’s tapering, and higher oil prices, then we could see NZD/USD pop up to and maybe above the 200 SMA to reach the .7150 inflection point.