It’s another light day in terms of data, but it looks like dollar bulls are going for a strong start.
Can this be enough to sustain the selloff on NZD/USD?
Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY’s bullish channel support test. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
FOMC member Williams explains that inflation dynamics are complicated, predicts annual CPI will reach 3.75% this year before sliding to 2% target by 2025
U.K. BRC retail sales monitor unchanged at 4.9% year-over-year vs. projected improvement to 5.1%, reflecting no change in same-store sales at retail level for MarchAustralia’s Westpac consumer sentiment index improved from 0.0% to 9.4% in April, as confidence ticked higher after RBA’s decision to pause rate hikes
Chinese headline CPI slowed from 1.0% to 0.7% year-over-year in March vs. estimated 1.0% reading, reaching slowest pace since September 2021
Chinese producer prices posted 2.5% year-over-year decline in March as expected, marking its sixth consecutive monthly drop
Australia and China reach agreement on some trade issues, possibly leading to eased restrictions on 20 billion AUD worth of Australian products
Japanese preliminary machine tool orders slipped by 15.2% year-over-year in March, following earlier 10.7% decline
BOJ Governor Ueda suggests that a small interest rate hike might not be a big issue for financial markets but Japanese economy is not yet in that position for tightening
Bank of Korea kept interest rates on hold and predicted slower inflationary pressures for Q2, but board members dash hopes for a rate cut soon
Price Action News
Overlay of USD Pairs 15-min
The U.S. dollar enjoyed a strong boost from revived hopes of a 0.25% Fed rate hike in May, but eventually returned these gains when risk appetite picked up during the Asian session.
Most Asian equities closed in the green, as downbeat CPI and PPI figures from China kept traders hopeful that central banks could soon pause their tightening cycles.
Upcoming Potential Catalysts on the Forex Economic Calendar:
FOMC members Hoolsbee, Harker, and Kashkari to testify starting 5:30 pm GMT
Japanese core machinery orders and PPI data at 11:50 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
NZD/USD: 15-minute
NZD/USD 15-min Forex Chart by TradingView
Dollar bulls are off to a strong start this week, keeping NZD/USD below its short-term falling trend line.
The pair is testing this resistance zone again, and a return in selling pressure could lead to a dip to the next support area at S1 (.6190) near the previous day lows.Even stronger selling pressure could drag price down to the next floor at S2 (.6160) as a handful of FOMC members might keep Fed tightening hopes intact.
Don’t forget that a pickup in May rate hike expectations was enough to boost the U.S. currency when most European markets resumed trading after Easter Monday.
On the other hand, a break above the trend line and pivot point (.6220) could lead to a reversal of the downtrend. This could lift NZD/USD up to R1 (.6250) near the previous day high.
Keep in mind that this pair moves an average of 70 pips per day, so take this figure into account when setting entries and exits!