Daily U.S. Session Watchlist: NZD/USD

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This pair is currently testing its rising channel bottom, and the U.S. retail sales release could determine if an uptrend continuation or reversal is due.

Will we see a bounce or a break?

Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at a rising trend line and area of interest on NZD/JPY. Be sure to check that out to see if there is still a potential play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • ECB monetary policy meeting minutes at 12:30 pm GMT
  • Canadian wholesale sales and manufacturing sales at 1:30 pm GMT
  • U.S. headline and core retail sales at 1:30 pm GMT
  • U.S. industrial production at 2:30 pm GMT
  • U.S. preliminary consumer sentiment index at 3:00 pm GMT

What to Watch: NZD/USD

NZD/USD 1-hour Forex Chart
NZD/USD 1-hour Forex Chart

NZD/USD formed higher lows and higher highs inside a rising channel on its short-term time frame.

The pair is sitting right at the bottom of the channel, still deciding whether to make a bounce or a break.

Which way will it go from here?

Technical indicators seem to be hinting at a breakdown and reversal from the climb, as Stochastic is turning lower from the overbought zone to reflect a return in selling pressure.

At the same time, the 100 SMA might be attempting a bearish crossover from the 200 SMA to confirm that bearish momentum is returning.

Of course this could all boil down to the upcoming U.S. retail sales report, which is slated to show a slowdown in consumer spending for April. Now this makes sense, given how the NFP reading for the same month turned out to be a huge disappointment!

Then again, note that the latest CPI release turned out much better than expected, possibly lifting the total value of retail sales in April. And based on the dollar’s reaction to the inflation report, an upside surprise might spur strong gains for the U.S. currency.

In any case, better check out the average NZD/USD volatility as a guide for setting stops and targets if you’re trading this pair.

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