Daily Forex News and Watchlist: NZD/USD

NZD/USD looks set to retest a short-term range resistance!

Will the pair stick to its consolidation? Or will we see a breakout in the next few hours?

Before moving on, ICYMI, yesterday’s watchlist looked at USD/CHF’s ascending channel pattern ahead of Powell’s speech. Be sure to check out if it’s still a good play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Canada’s building permits fell by 6.5% m/m in September (-0.5% expected, 4.3% in August)

In a speech, FOMC member Michael Barr shared that the Fed’s current policies “…are at or very near to the level that is sufficiently restrictive to bringing inflation back to 2%”

Japan’s bank lending improved by 2.8% y/y as expected in October (vs. 2.9% y/y in September)

China’s consumer inflation in October: -0.2% y/y (-0.1% y/y expected, 0.0% y/y previous)

China’s producer inflation in October: -2.6% y/y (-2.7% y/y expected, -2.5% y/y previous)

BOE Chief Economist Huw Pill hinted that the central bank doesn’t need to raise interest rates further and can maintain its current “restrictive” policies to fight high inflation

Price Action News

With not a lot of top-tier headlines released in the last few hours, the New Zealand dollar traded on market vibes. That is, risk-takers took their cues from the U.S. session and bought the “risky” NZD higher.

It also helped the commodity-related currency that at least some traders are already pricing in the Reserve Bank of New Zealand (RBNZ) sticking to its hawkish biases when the members meet later this month.

NZD has gained the most against EUR and CHF so far today and has registered the smallest wins against GBP and USD.

Upcoming Potential Catalysts on the Economic Calendar:

ECB’s economic bulletin at 9:00 am GMT
U.S. initial jobless claims at 1:30 pm GMT
ECB President Lagarde to give a speech at 5:30 pm GMT
FOMC Chairman Powell to give a speech at 7:00 pm GMT
BusinessNZ manufacturing index at 9:30 pm GMT
RBA’s quarterly monetary policy statement at 12:30 am GMT (Nov. 10)

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

NZD/USD 15-min Forex Chart by TradingView

As mentioned above, the New Zealand dollar got a bit more attention than its major counterparts when not a lot of fresh headlines moved the markets.

NZD/USD, in particular, bounced from its weekly lows near .5910 and is now trading closer to the R1 (.5930) Pivot Point levels just under the .5940 range resistance in the 15-minute time frame.

Will the pair stay within its range? Or will we see a breakout today?

Fed Chairman Powell is expected to participate in a panel discussion where he may say a thing or two about the Fed’s short-term plans. Based on the speeches that we’ve seen from other members so far this week, the Fed head honcho could lean into the “higher for longer” plan.

On the other hand, NZD has been relatively resilient despite weaker economic reports from China and shaky data releases in Europe. Until we see fresh headlines that would inspire another round of risk aversion, NZD could continue to receive support from forex playas.

Keep an eye on the .5940 range support in case we see an upside breakout today. A clear break above the .5940 – .5950 area sets the pair for a possible trip to the .5970 – .5980 previous area of interest.

But if NZD/USD finds resistance near yesterday’s highs, then NZD/USD bears could eye a potential move back down to the .5910 weekly lows.

What do you think? Which way will NZD/USD go?