With not a lot of top-tier data coming in, I’m setting my sights on two strong comdolls these days.
What’s next for AUD/NZD?
Before I show you my 4-hour setup, make sure you know all about the headlines that dominated the late U.S. and Asian session trading!
Upcoming Potential Catalysts on the Economic Calendar:
- Japan’s preliminary machine tool orders at 6:00 am GMT
- Germany’s trade balance at 7:00 am GMT
- Italy’s industrial production at 9:00 am GMT
- U.S. NFIB small business index at 11:00 am GMT
What to Watch: AUD/NZD
It’s a comdoll tug-o-pips!
AUD/NZD is hanging out at the 1.0650 zone that covers a 38.2% Fib retracement and a key inflection point on the 4-hour time frame.
Now that the 100 SMA has crossed below the 200 SMA, will AUD/NZD head down to its February lows?
Over the next couple of hours, only Germany’s trade data and Italy’s industrial production are scheduled for release.
This means that market risk sentiment will likely dictate price action and, if the previous sessions’ moves are any clue, we could see more strength for both AUD and NZD.
New Zealand has the tiniest bit of advantage over Australia, though, as the former stands out a bit more in controlling the spread of COVID-19. Not only that, but the Reserve Bank of Australia (RBA) is also a smidge more dovish than the Reserve Bank of New Zealand (RBNZ)’s recent statements.
Any momentum below 1.0650 could drag AUD/NZD down to its 1.0550 February lows.
Meanwhile, Aussie bulls might have to wait until AUD/NZD breaks above the 1.0700 handle closer to the 50% Fib retracement and the SMAs before they can begin targeting previous highs like 1.0800 and 1.0840.
This post first appeared on babypips.com
