NZD/CAD is making its way back after yesterday’s plunge!
I am checking the 15-minute chart for opportunities to extend the long-term trend of the pair.
Before we go any further, ICYMI, Yesterday’s watchlist examined the consolidation of the AUD/CAD triangle ahead of the Bank of Canada (BOC) policy announcement. Be sure to check if it’s still a good game!
And now for the main headlines that rocked the markets in the last trading sessions:
Headlines and recent economic data for the market:
The Bank of Canada surprised on Wednesday by raising interest rates by 25 basis points, to 4.75%. There is no clear guidance on next moves
Energy Information Administration (EIA): U.S. crude inventories surprisingly fell by 451,000 barrels in the week ending June 2, as refiners moved fuel to the highest level since 2019 over the Memorial Day holiday.
The RICS UK house price balance rose from -39 to -30 reversing the lower price decline in May
New Zealand’s manufacturing sales volume fell 2.1% qoq in the first quarter after declining 4.6% in the fourth quarter.
Overall bank lending in Japan accelerated from 3.2% to 3.4% yoy (versus 3.1% expected) in May
Japan’s final GDP was revised sharply higher from 1.9% to 2.7% y/y in the first quarter of 2023 due to upward adjustments to capital spending and private and domestic demand
China’s largest state bank has cut deposit rates, which should help pave the way for the People’s Bank of China (PBoC) to cut other interest rates.
Australia’s trade surplus narrowed from A$14.2 billion to A$11.15 billion in April as a decline in exports (-5.0%) reflected weak commodity demand and Chinese demand.
The Japanese Economic Watchers’ Poll improved from 54.6 to 55.0 in May thanks to higher retail and service activities
Price action news
The US dollar struggled to hold on to gains from the previous session, which likely contributed to the pro-risk and anti-dollar sentiment we saw during the Asian session.
There were no direct catalysts involved in the New Zealand dollar’s sharp rises, but it may have helped China’s larger state banks cut interest rates and improve risk sentiment overall.
The New Zealand dollar rose against all of the major currencies. It gained the most pips against safe-haven currencies such as the US dollar, Japanese yen and Swiss franc and the least against the Canadian dollar and British pound.
Eurozone revised GDP at 9:00 am GMT
Swiss National Bank President Jordan delivers a speech at 12:05pm GMT
US Initial Jobless Claims at 12:30pm GMT
China CPI and PPI reports at 1:30 AM GMT (Jun 9).
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Trade forex NZD/CAD for 15 minutes Planned by TV
high rate of?
Yesterday’s BoC based rate hike could push the NZD/CAD to new monthly lows but it looks like the pair is ready to fight its way back!
I am looking at the 0.8130 area to see if the current rally caters to enough sellers in the area.
As you can see, .8130 is near the support area broken this week, 61.8% Fibonacci retracement, and R1 (.8130) from today’s standard pivot point.
Of course, it is also possible for the NZD/CAD pair to rise to today’s pivot point (0.8100) just before extending its weeks-long downtrend.
After all, .8105 is the midpoint of Daily fluctuations of the New Zealand dollar / Canadian dollar.
If NZD/CAD starts declining at current levels, you should be ready for a possible retest of .8070 lows.
But if you see NZD/CAD heading towards higher resistance areas near 0.8130, then you can consider trading with the upside until it encounters significant resistance or selling at higher resistance areas.
