Anyone gutsy enough to trade New Zealand’s jobs report?
Here’s a bearish pullback setup on a Kiwi pair if you’re expecting a downbeat figure.
Before moving on, ICYMI, yesterday’s watchlist looked at a descending channel on AUD/JPY ahead of the RBA decision. Be sure to check out if it’s still a valid trade!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
RBA kept rates on hold at 0.10% as expected
RBA maintains inflationary pressures are transitory, no rush to hike soon
Australian retail sales sank 4.4% in December vs. projected 1.9% decline
Commodity prices rose 25.3% y/y in Australia vs. previous 28.7% gain
German retail sales slumped 5.5% vs. projected 1.3% drop
Swiss retail sales declined by 0.4% vs. estimated 5.5% increase
Swiss SECO consumer climate index fell from +4 to -4 vs. +3 consensus
French preliminary CPI rebounded 0.3% vs. projected 0.2% drop
Upcoming Potential Catalysts on the Forex Economic Calendar:
Canadian GDP m/m at 1:30 pm GMT
U.S. ISM manufacturing PMI at 3:00 pm GMT
U.S. JOLTS job openings at 3:00 pm GMT
New Zealand quarterly jobs report at 9:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: NZD/USD
Risk-off flows have been in play in the past trading sessions, as most economic reports highlighted weak spots in the consumer sector.
Will we see more downbeat reports ahead?
If so, NZD/USD could carry on with its bearish trend, as price is already trading below a falling trend line on its hourly chart.
A pullback seems to be in order, though, and the Fib retracement levels show where more sellers might be hanging out.
I’ve got my eye on the 50% level that lines up with the trend line and the 100 SMA dynamic resistance. This faster-moving MA is below the 200 SMA to confirm that the selloff is more likely to resume than to reverse.
To top it off, Stochastic is approaching overbought levels to indicate that buyers could use a break and let sellers take over soon.
Aside from the U.S. ISM manufacturing PMI and JOLTS job openings data, this pair has the quarterly jobs report of New Zealand to draw volatility from. Number crunchers are estimating a meager 0.4% uptick in hiring for Q4 2021, which would pale in comparison to the earlier 2.0% gain.
An even weaker than expected result could drag the Kiwi further south, especially if risk aversion extends its stay in the coming trading sessions.
