Risk-taking picked up in the past sessions, as global inflation concerns eased.
Will this be enough to spur a breakout for NZD/JPY?
Before moving on, ICYMI, today’s Asia-London session watchlist looked at a potential dip on ETH/USD. 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:
U.S. Senate close to temporary truce on debt ceiling
President Biden and Chinese President Xi to hold video call
Crude oil prices ease off highs, risk rebounds on cooling inflation
BOJ Governor Kuroda: Consumer inflation to rise on higher energy costs
Japanese leading indicators down from 104.1% to 101.8%
BOJ downgrades assessment of 5 out of 9 regions in Japan
Swiss jobless rate down from 2.9% to 2.8% as expected
U.K. Halifax HPI up by 1.7% vs. projected 1.3% gain, fastest rise since 2007
SNB foreign currency reserves grew from 929B CHF to 940B CHF
German industrial production sank by 4.0% vs. projected 0.4% dip
Upcoming Potential Catalysts on the Economic Calendar:
U.S. Challenger job cuts at 11:30 am GMT
U.S. initial jobless claims at 12:30 pm GMT
Canadian Ivey PMI at 2:00 pm GMT
BOC Governor Macklem’s speech at 2:30 pm GMT
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: NZD/JPY
Risk on, baby!
Higher-yielding currencies advanced earlier on, thanks to cooling inflation fears and positive geopolitical updates.
For one, the U.S. Senate is reportedly moving close to a deal that prevents a government shutdown.
Also, open communication lines between U.S. President Biden and Chinese President Xi are keeping investors hopeful for a more agreeable trade deal.
In the absence of any other major catalysts in the upcoming U.S. session, these might be enough to keep traders in the mood for riskier currencies throughout the day.
NZD/JPY looks ready to test the resistance of its symmetrical triangle pretty soon, and another surge in risk-taking might be enough to spur a break higher.
However, technical indicators are pointing the other way, with the 100 SMA below the 200 SMA and Stochastic approaching overbought territory.
Better keep close tabs on any updates regarding the U.S. debt ceiling, as these would likely impact risk appetite in the next few hours.
