It’s a very slow start to the new trading week, but volatility could pick up for the comdolls with economic updates from both Australia and New Zealand ahead. Will it bring in more traders to ride the trend higher in AUD/NZD?
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Fresh Market Headlines & Economic Data:
China’s economy grows 2.3% in 2020 as recovery quickens
Biden to yank Keystone XL permit on first day of presidency
Oil falls on coronavirus fears, strong dollar
Biden plans immediate executive actions to roll back Trump era after inauguration speech
EU to extend deadline until APRIL as MEPs unable to sign off trade deal
Japan manufacturers’ sentiment stabilises in Jan, services weaken
China industrial output rises 7.3% year-on-year in December; retail sales miss forecast
Upcoming Potential Catalysts on the Economic Calendar
New Zealand Business Confidence at 9:00 pm GMT
Australian New Home sales at 12:00 am GMT (Jan. 19)
What to Watch: AUD/NZD
On the one-hour chart above of AUD/NZD, we can see AUD/NZD in a slow grind higher, and with only Australian and New Zealand data ahead to provide some potential volatility, it’s likely our only shot at see some volatility if the news flow remains quiet.
Later in the Asia session, we’ll get the latest business sentiment update for New Zealand, as well as the latest new home sales data from Australia. Both are mid-tier events, so even if we see big surprises, the response may not be all that exciting.
Still if it can get the pair lower on the session, then traders may want to assess adding a long AUD/NZD swing trade to the books if the pair sees buying support at the previous area of interest / rising ‘lows’ pattern.
That should come around 1.0780, and if it does, the bulls have got a pretty solid chance of the uptrend continuing, at least until we get the Australian jobs update in a few days.
Of course, if we do see a spike in volatility off of a fresh, unexpected news event, don’t rule out a short play on AUD/NZD, especially if the rising ‘lows’ pattern breaks on negative Australian / positive New Zealand headlines (e.g., flailing Aussie-China relations, reduced lockdowns in New Zealand, RBNZ hack not as bad as originally seen, etc.)
