Daily Insight: All Eyes On RBNZ
Matt Simpson | Jun 11, 2014 03:44AM ET
ASIA ROUNDUP:
- AUD/NZD trades sideways awaiting the RBNZ rate decision tomorrow. AUD and NZD were the strongest currencies throughout Asia as risk sentiment continued through the session as investors seek higher yielding assets.
- AUD consumer sentiment back above 0% at 0.2% following last month's drop to -6.8% due to the budget 0 it's lowest since May '13
- JPY Corporate Goods Price Index came in at 4.4$, its highest since Nov '18; Business Survey fell from +14.1 to -13.9, it's lowest since June '11
- The greenback dominated the first half of the Asia session to see USD/CHF back above 0.90 and EUR/USD continue it's intraday downtrend.
- World bank cuts US growth forecast to 2.1% from 2.8%
UP NEXT:
- UK employment data are the headline figures from Europe today. With unemployment forecast to drop -0.1% at 6.7% this could be its lowest since April 2009 and bullish for GBP.
- US Monthly budget is forecast to be in defecit with a number above consensus bullish for USD, and even more so if it is above 0 (surplus).
- RBNZ rate announcement will be the big number from Australasia and closely watched around the world. Widely expected to increase by 25bps, this may not have been priced in yet as the markets have been short NZD for 1 month since speculating RBNZ may cut back their rate-hike program.
AUD/JPY: Inverted H&S projects 96.01 for intraday traders.
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Intraday price action has confirmed an Inverted Head and Shoulders pattern (H&S), which is a continuation sign during an uptrend.
The right shoulder (RS) has formed above the daily pivot and the pattern projects an approximate target around 96.20. However, due to the confluence of resistance starting around 96.01, I have gone for the more conservative target. Notice how the past 2 H1 candles have hesitated near the highs, which suggests potential for a retracement. Hopefully we will retrace towards the breakout line and produce a bullish buy signal to hop on board the trend. A break back below the neckline invalidates the H&S but may provide bullish setups above the daily pivot. In which case lower the bullish target to 96.00. A break below the Daily Pivot could target 95.60 but due to being back within the correction zone I would stand aside and await a trend to develop.
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