Happy Friday, traders! Are you ready to trade at the end of the week? Here’s what you need to know before you start:
NZD/USD: testing tactical support
Reserve Bank holds the rate
The Reserve Bank of New Zealand kept the interest rate at 0.25%, where it has been since March. However, it announced the expansion of the quantitative ease program to $60bln from the previous $33 to make sure the borrowing cost if low enough. It stressed that it is ready to reduce the interest rate as well as expand the asset purchase program should there be an indication for it.
On the H1 chart of NZD/USD, the currency pair fell to the tactical resistance of 0.6000, which formed at the end of April and was visited a week ago. Shortly after, it bounces upwards. From the short-term perspective, that’s a significant change of movement base to lower levels and below the Moving Averages, which will be checking now any serious bullish potential.
From a larger perspective, the NZD/USD shifted to the lower boundary of the core movement channel, testing the support of 200-MA slightly above the tactical resistance of 0.6000. Very likely, it will get back up to stay within the area above 200-MA to test 100-MA. If the currency moves above to cross the resistance of the 100-MA and test the 50-MA, that would mean that the monetary policy news hasn’t had much effect on the currency pair in the mid-term.
The first week of November promises to be eventful, as we have the Fed meeting, the BOE update, and the NFP release. Read more details here.
Last week several important economic updates influenced the Forex market. US preliminary GDP fell less than expected (0.6% actual vs. 0.7% forecast). Below you will find the key events to trade on during the week from August 29 to September 2.
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.