Better-than-expected German consumer sentiment data is setting up EUR/NZD for a range bounce ahead of New Zealand’s CPI report!
Will EUR/NZD’s range support hold for another day today?
Before moving on, ICYMI, yesterday’s watchlist checked out a break-and-retest opportunity on GBP/AUD’s 1-hour chart ahead of Australia’s PMI release. 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:
China, Hong Kong, and Singapore markets still out on bank holidays
BNZ-Business NZ services index fell 1.7 points to 52.1 in December
Supply constraints and weaker demand drag Australia’s manufacturing PMI to 49.8 in January, its first contraction in 32 months
AU services PMI up from 47.3 to 48.3 in January
AU NAB business confidence improved by 3 points to -1 in December
Japan’s manufacturing PMI unchanged at 48.9, services PMI higher from 51.1 to 52.3 in January
Germany’s GfK consumer climate rose from -37.6 to -33.9 heading into February – the highest since August 2022 – on falling energy prices and higher income expectations
UK’s public borrowing clocked in at 27.4B GBP in December, up from 10.7B GBP from a year earlier and marked the highest on record
France’s manufacturing PMI posts first expansion in five months but services PMI fell from 49.5 to 49.2 in January
Germany’s manufacturing PMI unexpectedly edged lower from 47.1 to 47.0 in January but services PMI improved from 49.2 to 50.4
Eurozone’s manufacturing PMI up from 47.8 to 48.8, services PMI higher from 49.3 to 50.2 in January
UK’s factory activity increased from 45.3 to 46.7 in January
ECB President Lagarde: rates will “have to rise significantly at a steady pace” and “stay at those levels for as long as necessary”
Gold prices march higher on slower Fed rate-hike bets
Upcoming Potential Catalysts on the Forex Economic Calendar:
US manufacturing and services PMIs at 2:45 pm GMT
NZ quarterly CPI report at 9:45 pm GMT
AU MI leading index at 11:30 pm GMT
AU quarterly CPI report at 12:30 am GMT (Jan 25)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: EUR/NZD
The euro has gained a pip or two (or fifty) against its major counterparts so far this week thanks in part to the European Central Bank (ECB) sticking to its hawkish plans even though other major central banks are slowing down their tightening.
EUR could see even more demand today after factory activity and services reports showed green shoots for the economy.
Buyers are particularly happy about Germany’s consumer sentiment data, which showed higher income and lower energy expectations.
All the euro-buying could benefit EUR/NZD, which is flirting with the bottom of a range that hasn’t been broken since December 2023.
Even Stochastic is on the bulls’ side as it crosses up while visiting the “oversold” territory.
Will the range hold for another day?
Keep close tabs on the strength of EUR demand, which could determine if EUR/NZD would hit the 1.5570 mid-range levels before finding a new direction.
Before you put on swing-term trades, though, you gotta prepare for New Zealand’s quarterly CPI release at 9:45 pm GMT.
Analysts are expecting inflation to slow down from 2.2% to 1.3% in Q4. If the release highlights the divergence between RBNZ and ECB’s policy plans, then EUR/NZD could see more sustained directional moves.
