Price Action News
Overlay of NZD vs. Major Currencies Chart by TradingView
As expected, the Reserve Bank of New Zealand (RBNZ) kept its official cash rate at 5.50% in February.
Unfortunately for NZD bulls, the central bank’s statement wasn’t as hawkish as some had expected. See, RBNZ also thinks that interest rates would peak at 5.6%, lower than the previous 5.7% estimates.
NZD dropped across the board at the not-so-hawkish update. NZD is trading the weakest against safe havens (USD, JPY, CHF) and is clocking the least losses against its fellow comdolls (AUD, CAD).
Upcoming Potential Catalysts on the Economic Calendar:
Canada’s current account balance at 1:30 pm GMT
U.S. preliminary GDP at 1:30 pm GMT
U.S. crude oil inventories at 3:30 pm GMT
FOMC member Raphael Bostic to give a speech at 5:00 pm GMT
FOMC member John Williams to give a speech at 5:45 pm GMT
RBNZ Gov. Orr to talk monetary policies at 7:10 pm GMT
Japan’s industrial production at 11:50 pm GMT
Japan’s retail sales at 11:50 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ️
USD/JPY: 15-min
USD/JPY 15-min Forex Chart by TradingView
Who’s up for a bit of USD trading today?
USD/JPY is chillin’ just under the 150.80 area that marks the top of a days-long range and today’s R1 (150.78) Pivot Point line.
Interestingly, we’re seeing a few bearish candlesticks that may lead to a short-term downswing for the pair.
Will today’s U.S. preliminary GDP release lead to USD/JPY dropping to the lower inflection points?
The U.S. Preliminary GDP Event Guide points out that lower price pressures and weak consumer numbers may lead to downgraded GDP growth and price indices. For newbies out there, weaker-than-expected growth figures could fan Fed interest rate cut bets and weigh on the dollar.
USD/JPY – which already looks like it’s getting rejected from a range resistance – could draw enough bearish pressure to revisit the 150.50 mid-range area near the Pivot Point (150.42) line and the 100 and 200 SMAs.
Before you sell USD/JPY like there’s no tomorrow, though, you should keep in mind that we may see limited USD reaction and profit-taking ahead of tomorrow’s anticipated U.S. core PCE price index release.
Bears can consider scaling in at current levels and adding to potential bearish plays once we see lower GDP figures. Quick short-term trades are also on the table if you’d rather be out of a position before the day ends or Uncle Sam drops the Fed’s preferred inflation measure.
What do you think? Will USD/JPY extend its downswing? Or will the pair remain near the top of the range before it picks a fresh direction after the core PCE price release?
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