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The Reserve Bank of New Zealand (RBNZ) is about to print its latest monetary policy decision!
Will speculation and then market reaction to the event extend AUD’s gains against NZD?
Before moving on, ICYMI, yesterday’s watchlist checked out NZD/USD’s short-term downtrend ahead of New Zealand’s PPI release. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Rightmove: The UK housing market stalled, pushing up prices by just $14 in February
German Bundesbank: the economy may shrink slightly this year, inflation has passed its peak
NZ producer input prices ease from 0.8% to 0.5% q/q in Q4, the lowest since Q2 2022
Judo Bank Australia manufacturing PMI hit a two-month high of 48.9 in February
Australia’s Judo Bank services business activity PMI improved from 48.6 to 49.2 but remained in contraction for a fifth straight month in February
RBA meeting minutes showed members considered raising rates by 50bps in February
Japan’s factory activity was down from 48.9 to 47.4 in February, contracting at its fastest pace in 2-1/2 years on weak global demand
Jibun Bank Japan services PMI rose from 52.3 to 53.6, an eight-month high, in February as new orders accelerated and new businesses increased slightly
Asia markets mixed as investors digest private surveys on factory activity
France’s services PMI rose to expansion territory, up from 49.4 to 52.8 in February but the manufacturing PMI dipped from 50.5 to 47.9
Rising prices push Switzerland’s trade surplus to its highest levels since April 2022
UK public sector posts unexpected budget surplus in January
Germany’s manufacturing PMI dipped from 47.3 to 46.5, services PMI jumped from 50.7 to 51.3 in February
Rising demand, healing supply chains, and backlog reduction pushes Eurozone business activity to a nine-month high in February
Eurozone’s manufacturing and services PMIs at 9:00 am GMT
U.K.’s manufacturing and services PMIs at 9:30 am GMT
German ZEW economic sentiment at 10:00 am GMT
Eurozone ZEW economic sentiment at 10:00 am GMT
Canada’s monthly CPI at 1:30 pm GMT
Canada’s retail sales at 1:30 pm GMT
U.S. manufacturing and services PMIs at 2:45 pm GMT
U.S. existing home sales at 3:00 pm GMT
NZ trade balance at 9:45 pm GMT
RBNZ’s monetary policy decision at 1:00 am GMT (Feb 22)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ? ?️
What to Watch: AUD/NZD
AUD/NZD 1-hour Forex Chart by TradingView
I don’t know if you’ve noticed by AUD/NZD has been making higher highs and higher lows since finding support at the 1.0900 psychological handle.
The pair is now trading near 1.1040, which lines up with the 38.2% Fibonacci retracement of last week’s upswing and February’s broken resistance zone.
Are we looking at a break-and-retest situation here?
Just after U.S. session trading the RBNZ will publish its first monetary policy decision since November.
Word around is that the central bank will raise its interest rates by 25bps after a 75bps rate hike in November.
With inflation undershooting RBNZ’s estimates and global inflation decelerating, the central bank will have more room to take the metal from the pedal.
A not-so-hawkish RBNZ statement may sent AUD/NZD back to its weekly highs. AUD/NZD could shoot up to 1.1080 if not bust through the 1.1100 zone.
If RBNZ surprises with a 50bps rate hike though, if the statement turns out more hawkish than markets are expecting, then AUD/NZD could retest previous lows.
In case of a hawkish policy decision, I’ll be looking at the 1.1025 or 1.1000 inflection points for potential support zones.
Will AUD/NZD head towards the 100 and 200 SMAs this week? Or will the pair make new intraweek highs?
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