Daily Forex News and Watchlist: AUD/NZD

We’re checkin’ out a battle of the comdolls as AUD/NZD looks ready to extend a short-term downtrend!

Will AUD catch an upswing? Or will NZD extend the Aussie’s downtrend?

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:

Consent for new residential buildings continues to plunge in New Zealand, down 2.6% m/m in May (from -2.6%m/m in April)

BOJ’s Tankan manufacturing index jumped from 1 to 5, the non-manufacturing index was also higher from 20 to 23 in Q2 as raw material costs peaked and the removal of pandemic curbs lifted factory output and consumption

Melbourne Institute inflation gauge slowed down from 0.9% to 0.1% in May

Australia ANZ Indeed job ads dipped by 2.5% m/m in June (vs. 0.1% in May). ANZ noted that “It will take time for the labour market tightness to ease” but that “the direction of change is clear.”

Volatile Australian building approvals rose by 20.6% m/m in May (vs. -6.8% in April)

China’s Caixin manufacturing PMI slowed down from 50.9 to 50.5 in June (vs. 50.0 expected) as firms grew increasingly concerned about sluggish market conditions

Switzerland’s CPI slowed down to 0.1% m/m in June (vs. 0.3% in May) and 1.7% y/y (vs. 2.2% in May) as air transport, petrol, diesel, and stone fruit prices decreased while fruiting vegetables and hotels increased prices.

Price Action News

Risk-taking was the name of the game during the Asian and early European sessions, as traders caught up to their U.S. counterparts in pricing in a slower core PCE read and possibly a less hawkish Fed policy trajectory on Friday.

It also didn’t hurt that traders who are keen to buy assets on the first day of the month (and second half of the year!) had momentum on their side.

Traders particularly liked the New Zealand dollar, which benefited from a better-than-expected Caixin manufacturing PMI and posted the sharpest gains against all of its major counterparts.

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.S. final S&P manufacturing PMI at 1:45 pm GMT
U.S. ISM manufacturing PMI at 2:00 pm GMT
NZIER business confidence at 10:00 pm GMT
RBA’s policy decision at 4:30 am GMT (July 4)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

AUD/NZD: 15-min

AUD/NZD looks ready to extend its downtrend ahead of the Reserve Bank of Australia’s (RBA) decision!

As you can see, AUD/NZD bounced from the S1 (1.0820) line of today’s Standard Pivot Points but also encountered resistance around the mid-channel area near 1.0840.

Are AUD bears just taking a breather? Or are AUD traders gearing up for RBA-induced volatility?

Remember that traders mostly expect the RBA to keep its interest rates at 4.10% after raising its rates by 25 basis points in May and in June.

If the central bank keeps its rates steady as expected, then AUD/NZD could dip back to its 1.0820 lows or even attempt to hit the 1.0800 psychological level.

But if RBA surprises to the upside, then AUD/NZD may revisit its July highs between the 1.0850 and 1.0860 levels.

What do you think?