NZD fell along with other “risky” assets earlier today.
Can the comdoll recover some pips ahead of this week’s RBNZ policy decision?
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!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Japan’s services producer price index slowed down from 2.4% y/y to 2.1% y/y in January
NZD and other risk assets trade lower ahead of this week’s economic data releases
Japan’s 10-year government bond yield dropped below 0.7%, its lowest in over three weeks, as it tracked a decline in US bond yields as investors
Price Action News
Overlay of NZD vs. Major Currencies Chart by TradingView
There were no top-tier economic data releases during the Asian and early London session trading, which made it easier for traders to stay on the sidelines.
And why not? The markets are in for a BUSY trading week as we deal with global growth and inflation updates as well as RBNZ’s February monetary policy decision.
The New Zealand dollar, which had been benefiting from hawkish RBNZ expectations for the past couple of days, likely saw the most profit-taking today. The comdoll is trading in the red and is weakest against EUR, CHF, and USD while logging in the least losses against fellow comdolls like AUD and CAD.
Upcoming Potential Catalysts on the Economic Calendar:
U.S. new home sales at 3:00 pm GMT
ECB President Lagarde to give a speech at 4:00 pm GMT
Japan’s national core CPI at 11:30 pm GMT
U.K.’s BRC shop price index at 12:01 am GMT (Feb. 27)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
NZD/CHF 15-min Forex Chart by TradingView
I spy with my eye a simple range play!
As mentioned above, the New Zealand dollar likely bore the brunt of the profit-taking ahead of this week’s economic data parade.
NZD/CHF, in particular, extended its Friday downswing and hit the .5425 area today. Interestingly, .5425 has been an area of interest for NZD/CHF since last week. This time, the support zone lines up with the S2 (.5430) Pivot Point line.
How low can NZD/CHF go before the bulls come back to play?
Word around is that TD Securities has joined ANZ Research in calling for an RBNZ interest rate hike later this week. Pretty interesting considering that the markets are mostly expecting a hold decision from Governor Orr and his team.
If more traders jump in the “interest rate hike” train, then NZD/CHF may draw in more buyers around the short-term technical support zone. The pair could revisit the .5445 minor psychological level and mid-range zone if not jump all the way to the .5460 previous highs.
Before you buy NZD/CHF like there’s no tomorrow, though, you should consider that overall risk sentiment is currently leaning bearish while traders wait for this week’s data releases.
For NZD/CHF bulls, you may have higher odds of gaining pips if you wait for a bullish fundamental catalyst and maybe consistently bullish candlesticks around the current support zone.
Not sure where to place your entry and exit orders? Take a closer look at NZD/CHF’s average daily volatility to improve your odds!