NZD WILD RIDE! Forex Trading Opportunities | ECB, BoJ & EURNZD Analysis

Good day, Team GCI.

You may wonder why the NZD got so strong, so quickly yesterday.

Are there still opportunities for a return to normal? Let’s see.

In today’s Market Outlook, let’s take a look at Forex trading on Brent Crude Oil, USDJPY, EURUSD, and EURNZD.

Just a reminder that these videos are intended as observational and educational, and are not to be considered as trading advice.

So? What happened?

According to analysts’ expectations, the RBNZ was supposed to raise interest rates to 3%, and this was already baked into the value of NZD.

But they didn’t, and this is what happens when the actual figure misses the forecast figure.

In this case, it was dramatic.

In our News Catalyst Fade strategy, we look to have economic news drive price AGAINST the trend.

In the case of NZD, EURNZD was the strongest obvious trend as EUR has been weak recently.

We then wait for a downturn in one of the DI lines in the ADX and then a cross to the downside in the stochastic oscillator.

As we have seen in other examples, depending on the pair and the severity of the news item, we may have to look at more than the 15-minute chart and may have to wait on the 4-hour or daily chart.

However, when the figures miss this badly, we need to be very careful, as we found a couple of weeks ago with Australian employment figures that were wayyyy off.

Also, if you still want to short EURNZD, be careful as the ECB will be announcing their interest rate today.

The forecast calls for no change, but one never knows, and the press conference and statement could further drive the markets.

Most EUR pairs, except EURNZD, show EUR weakness, so we need to see if the ECB will react more to inflation or to the slowdown in growth.

Speaking of growth, today we also have US GDP, so we will be looking for pullbacks against the strong USD, like on the 4-hour chart on USDJPY.

Inflation, the war, and high bond yields are keeping USD strong so let’s see what happens after the news.

Speaking of USDJPY, watch out for tomorrow’s BoJ interest rate decision, report, and press conference.

And, very importantly, catch up with us next Tuesday as we will be looking very seriously at the US midterm elections and how they could affect forex pairs, commodities and the US indices.

And, finally, if you are waiting for good news on the price of oil for that big short, we will have to wait a bit longer as the price is still rising. And not far from April’s highs on Brent Crude.

That’s all for now.