Daily Asia-London Sessions Watchlist: NZD/CAD


  Just when we thought NZD/CAD was about to break the range to the

  upside, the New Zealand government hits Kiwi bulls with news of a

  temporary lockdown to send NZD lower against the rest of the major

  currencies. That brought NZD/CAD back firmly into the control of the

  bears after the market broke below strong support around the 0.8770


  Its likely the market will consolidation for the next few hours as

  trader await the latest monetary policy decision from the Reserve Bank

  of New Zealand. Well get that event at 2:00 am GMT, and with New

  Zealand going back into lockdown, the expectations of what the RBNZ will

  say just got a whole lot hazier.

  Will they still hike the official cash rate from 0.25% to 0.50%? Or

  will the see the need to keep easy money conditions going as the

  covid-19 pandemic continues to wreak havoc on the globe?

  Whatever they decide, its likely to spark a strong move in NZD pairs

  in the short-term. And with the current trend favoring the bears in

  NZD/CAD, well be on the lookout for short setup in a scenario where the

  RBNZ decides to hold the official cash rate at 0.25% (more rate hike

  bets likely come down) and the upcoming API crude oil inventory data

  shows a decrease in oil inventory. In that scenario, the area between

  0.8770 – 0.8800 may draw in both technical and fundamental traders

  looking to sell.

  If the RBNZ does hike and is pretty optimistic that the lockdown will

  be short-lived, the Kiwi could rally from current levels given that

  its already given back the speculative gains leading up to the event.

  NZD/CAD will likely find support down to the previous swing low around

  0.8700 and bounce higher, especially if oil prices take a dip on the

  inventory data.

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