Forex recap and the week ahead : NZD/USD

Mark O’Donnell Blackbull Markets Limited

While NZDUSD continued its bearishness last week, it showed a strong move up on Wednesday to produce a Thursday high. However, it sold off very quickly as it continued its drop during Thursday's London and New York sessions.

The pair mostly consolidated on Monday and Tuesday. NZ Unemployment Rate report was the only high impact news coming from New Zealand last week but failed to affect a substantial move, and the NZDUSD kept inside of Monday’s range.

Last week, the big fundamental impact came from the US, which had FOMC on Wednesday and Non-Farm Payroll on Friday. The former event is what finally broke the pair out of its range, pushing up over 130 pips in just a couple of hours. As noted above, the pair quickly reversed this climb and eventually ended the week lower by 0.77%. The NZDUSD has now racked up a monthly loss of just over 7.00%. The next two worst performing pairs on the monthly time scale are the GBPUSD and the AUDUSD, down by 5.63% and 5.48%, respectively.

In the chart, we see the weekly opening price, and last Thursday’s high noted. In the bottom window, we see the Stochastic indicator from TradingView.

Traders who use this indicator will try to look for overbought or oversold areas in price - gauging whether a sell or buy is unfolding when the indicator is showing extremes on either end of the window. It could also be used for divergence as we see a few hours before FOMC news. The indicator did not make a lower low, while the NZD/USD moved slightly lower than the low made in the previous session.

Next week’s high impact events

Events relating to the NZDUSD this week are the numerous speeches by US Federal Reserve officials. President of the Federal Reserve Bank of Atlanta, Raphael Bostic, speaks on Monday and Tuesday, likely to further dampen hopes for a 75 basis points hike from the Fed in June. The more hawkish officials such as John C. Williams (Federal Reserve Bank of New York) and Christopher Waller (Board of Governors) take the mic after Bostic, potential building a case against Bostic’s and Fed Chair Jerome Powell’s dovishness.

Thrown in the mix this week is the US Inflation Rate YoY for April. This report is due on Wednesday (UTC+4) and is expected to fall closer to 8.0% from 8.5% in March.

Author

Mark O’Donnell

Blackbull Markets Limited

Mark O’Donnell is a Research Analyst with BlackBull Markets in Auckland, New Zealand.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.