A lack of fresh catalysts got traders worrying about geopolitical tensions from last week.
Will today’s market themes extend NZD/JPY’s downswing?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
New Zealand’s services index plummets from 49.8 to 45.9 in Jan, the lowest since Oct 2021
Brent crude briefly trades above $96 on Russia-Ukraine tensions
Australia shares rise on energy, gold boost
Geopolitical risks, U.S. inflation weigh on Asian FX as dollar stays buoyant
FOMC member Bullard to give an interview at 4:00 pm GMT
ECB President Lagarde to testify before the European Parliament at 4:15 am GMT
New Zealand visitor arrivals at 9:45 pm GMT
Japan’s preliminary GDP at 11:50 pm GMT
RBA’s meeting minutes at 12:30 am GMT (Feb 15)
U.K.’s labor market numbers at 7:00 am GMT (Feb 15)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ? ?️
What to Watch: NZD/JPY
NZD/JPY 1-hour Forex Chart
No major economic reports or catalysts showed up today, so market players continued to trade their fears of increased geopolitical tensions between Russia and Ukraine (and the U.S.).
In the FX space, this meant strength for safe-havens like the yen and weakness for high-yielding bets like the Aussie and Kiwi.
NZD/JPY has now broken below a trend line that’s been supporting the pair since late January.
Kiwi is sporting long wicks around the 76.50 levels but so far it hasn’t seen sustained buying pressure. It also doesn’t help that NZD/JPY is trading below the 100 and 200 SMA on the 1-hour chart.
Are we seeing a breakdown of NZD/JPY’s short-term uptrend?
I’m not seeing top-tier reports on the docket in the next trading sessions so we could see the Russia-Ukraine and U.S. inflation headlines continue to play out. Unless we see positive headlines, NZD/JPY will likely extend its downswing and head to areas of interest like 76.00 or 75.80.
If we see promising headlines, however, or if U.S. traders started the week by taking risks, then NZD/JPY could return to its uptrend above the 100 and 200 SMA.
