The RBNZ is about to print its policy decision!
Will we see a buy-the-rumor, sell-the-news scenario on NZD/CAD’s 4-hour chart?
Before moving on, ICYMI, yesterday’s watchlist looked at AUD/JPY’s triangle pattern as traders focused on geopolitical tensions in Ukraine. 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:
Putin recognizes Ukrainian separatist regions Donetsk and Luhansk as independent, orders “peacekeeping” operations in the areas
U.S. coordinating with EU, U.K., Australia, and other allies before announcing sanctions on target key Russian individuals and entities
New Zealand credit card spending growth slows from 3.1% to 0.2% in December
WTI crude oil hits 7 1/2 -year high around $96 per parrel on escalating tensions in Europe
Dollar Index firmed up on geopolitical and inflation risks, NZD higher ahead of RBNZ meeting
Global stocks decline on Ukraine tensions
Germany’s IfO business climate at 9:00 am GMT
U.S. flash manufacturing and services PMIs at 2:45 pm GMT
U.S. CB consumer sentiment data at 3:00 pm GMT
Australia’s quarterly wage price index at 12:30 am GMT (Feb 23)
RBNZ’s monetary policy statement at 1:00 am GMT (Feb 23)
Germany’s GfK consumer climate at 7:00 am GMT (Feb 23)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ? ?️
What to Watch: NZD/CAD
NZD/CAD 4-hour Forex Chart
In case you missed it, traders have been buying NZD against CAD since the start of the month.
And why not? In its last two meetings, the Reserve Bank of New Zealand (RBNZ) had chosen to raise its interest rates by 25 basis points.
Now that unemployment is at an all-time low and inflation is at multi-year highs, markets don’t see the RBNZ sitting on its hands this week.
Will tomorrow’s decision inspire a buy-the-rumor, sell-the-news situation for NZD/CAD? The pair has already gone up by about 250 pips since late January and it’s fast approaching a key inflection point.
I’m talking about the .8625 zone! The area has not only served as support in the second half of 2021, but it’s also near the retest of a trend line resistance that hasn’t been broken since September 2021.
Escalating tensions in the European region would make it easy for traders to sell high-yielding bets like NZD against oil-related currencies like CAD. NZD/CAD could find resistance at the .8550 and .8600 levels before extending a months-long downtrend.
If RBNZ hints at more rate hike plans, however, then NZD/CAD just might get enough support to seriously test the .8625 resistance zone.
Make sure to keep your eyes peeled to see how NZD/CAD reacts to RBNZ’s decision!
