The Kiwi may be up for a pick up in volatility with inflation expectations data right around the corner from New Zealand. Will that keep the momentum lower in AUD/NZD going?
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at CAD/JPY ahead of the latest CPI data from Canada, so be sure to check that out to see if there is still a potential play!
Intermarket Update:
Equity Markets Bond Yields Commodities & Crypto
DAX: 16,251.13 +0.02%
FTSE: 7,291.20 -0.49%
S&P 500: 4,688.67 -0.26%
NASDAQ: 15,921.57 -0.33% US 10-YR: 1.589% -0.045
Bund 10-YR: -0.249% -0.009
UK 10-YR: 0.959% -0.005
JPN 10-YR: 0.071% -0.003 Oil: 78.11 -3.28%
Gold: 1,869.10 +0.81%
Bitcoin: $59,928.75 +0.29%
Ether: $4,228.24 +0.72%
Solana: $215.63 -3.73%
Fresh Market Headlines and Economic Data:
U.S. equities slip despite strong retail earnings reports
U.S. mortgage applications increased 6% on a seasonally unadjusted basis from September to October – Mortgage Bankers Association
U.S. Housing starts fall 0.7% in October; Building permits rise 4.0%
Canadian inflation rate: 4.7% in October vs. 4.4% in September, inline with forecasts
ECB must be ready to act on inflation if proves to be more durable than expected: ECB board member Schnabel
Germany recorded more than 50,000 new cases on Wednesday; Government imposes restrictions on unvaccinated people
Crypto.com buys naming rights for Staples Center
U.S. Energy Information Administration reported domestic crude inventories fell 2.1M barrels last week; gasoline stockpiles dipped by 707K barrels
Upcoming Potential Catalysts on the Economic Calendar
New Zealand Inflation Expectations at 2:00 am GMT (Nov. 18)
RBA Assistant Governor Ellis speech at 5:35 am GMT (Nov. 18)
Swiss Trade Balance at 7:00 am GMT (Nov. 18)
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: AUD/NZD
On the one hour chart of AUD/NZD above, we can see that the market quickly turned lower this week after a steady move higher in November from 1.0340 – 1.0450. That turn was likely a reaction to RBA Governor Lowe, who commented this week that current data and forecasts did not currently warrant a rate hike earlier than 2024, breaking the spirit of many Aussie bulls in the process.
That momentum may get a fresh boost in the upcoming session as we’ll get the latest inflation expectations from New Zealand, which will likely re-iterate that high rates are likely here to stay. This could be a bullish catalyst for the Kiwi in the short-term if a significant pick up from the previous survey number of 2.27%, a highly probably scenario.
If we do see this scenario play out and the bears put the pressure on AUD/NZD, look out for a move to the previous swing low around 1.0340, which is well within the daily average true range for the pair, currently around 50 pips.
Now, if we get a surprise from the survey indicating that inflation may cool in the short-term, then it’s possible that AUD/NZD could give back some of its recent downside move. Technical traders who are eyeing this minor support interest and oversold stochastic signal may jump in a market and take the pair higher on the session. If so, we could see AUD/NZD trade up to 1.0400 – 1.0420 before that reaction runs out of steam
