The next trading sessions are light on economic data releases but that doesn’t mean we won’t see volatility!
I’m checking out AUD/NZD’s range support today. Will the pair bounce from an established support zone?
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:
ECB President Lagarde hinted that a July rate hike is likely
AUD steady as Labor claims victory in the federal election
Beijing sees most cases of this outbreak; lockdown angst fueled
Rightmove: UK house prices have soared by a ‘record-breaking’ £55,000 since the pandemic began
Crude oil higher on tight supply, potential demand of US driving season
Dollar slips as China rekindles growth hopes
Canadian markets out on Victoria Day holiday
BOE Gov Bailey to participate in a panel discussion in Vienna at 2:15 pm GMT
NZ quarterly retail sales at 10:45 pm GMT
AU flash manufacturing and services PMIs at 11:00 pm GMT
Japan’s flash manufacturing at 12:30 am GMT (May 24)
BOJ’s core CPI at 5:00 am GMT (May 24)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/NZD
Asian session trading was light on economic data releases today but volatility remained alive thanks to traders taking on more risks.
USD lost pips against its major counterparts thanks to a bit of optimism over Shanghai easing out of lockdown and the People’s Bank of China (PBoC) unexpectedly cutting its rates last week.
The risk-friendly theme might get AUD and NZD bulls moving this week. I’m looking at AUD/NZD, which is testing the bottom of a range that hasn’t been broken since the start of the month.
Stochastic is currently favoring another range support bounce as it hangs out in oversold territory.
Before you buy AUD/NZD like there’s no tomorrow, take note that the Reserve Bank of New Zealand (RBNZ) is expected to raise its interest rates by as much as 50 basis points later this week.
Expectations of a hawkish RBNZ decision could drag AUD/NZD to its 1.0940 previous lows.
But if traders continue to buy AUD due to its connections to China’s economy, or if traders anticipate peak hawkishness from RBNZ this week, then AUD/NZD’s range support may hold and inspire a bounce to the mid-range or range resistance levels.