- RBNZ held interest rates as widely expected and will continue to do so “until next year”. Governor Orr described the NZ economy as more resilient than expected, and stated they expect lending rates form their new QE program to be “full and wholesome”. With that, traders pushed the NZD higher as negative interest rates appeared to be less imminent than originally expected, although RBNZ did reiterate the potential for them to arrive.
- ECB’s Christine Lagarde was less rosy on Europe’s outlook and the vaccine, saying Europe could still face reoccurring cycles of viral spread and therefore restrictions (ie lockdowns). Meanwhile, EU banks have been told to prepare for a rise in loan delinquencies due to the pandemic and new lockdowns.
- President Trump’s legal team continued to push ahead with legal challenges to the election, despite having several already thrown out of court. Wall Street appears unconcerned the results will be overturned and world leaders continue to congratulate Joe Biden’s win.
- Equities closed near their highs, WTI and Brent failed to sustain their breakouts above key resistance and NZD was the strongest major. Volatility remained contained overall, with most major markets we track remaining below their 10-day ATR’s (average true ranges).
Today’s Calendar Events (Time are GMT+10 Sydney)
- No major economic news is scheduled
- GBP pairs and the FTSE 100 (UK100) are in focus for news traders around 18:00 with the release of GDP and manufacturing output.
AUD/USD: 0.7250 Is Pivotal
- Prices are consolidating after reaching our 0.7340 target.
- A bearish hammer and spinning top doji underscore a hesitancy to break higher.
- A break beneath the 0.7380 – 0.7250 support zone conforms a counter-trend reversal, whilst a break above 0.3740 bring the 0.7400 highs into focus.
- Range trading strategies can be considered between 0.7250 – 0.7340.
Gold (XAU/USD): Consider a Break Below 1850
- Prices have consolidated above 1850 since Monday’s mammoth bearish candle, and remain beneath the 50-day eMA.
- A break below 1850 brings the 1800 support zone into focus.
- A break above 1900 warns of a deeper correction against Monday’s candle.
Bitcoin (BTCUSD): Bulls Consider a Break Above 16k
- A higher low has formed at 14,800 and the 38.2% Fibonacci level.
- Yesterday’s bullish candle broke above the prior inside bar to show range expansion is underway, in line with the dominant trend.
- A break above 16,000 brings 17,000 and the 17,234 highs into focus.
NZD/USD: The pair rallied after yesterday’s RBNZ meeting and is closing in on the 0.6930 target. The bias remains bullish above the 0.6860 swing low.
NZD/JPY: Prices have broken above key resistance at 72.00. The bias remains bullish above 72.00 with 73.55 now in focus.
WTI (WTI): Removed from watchlist. Prices initially broke above 42.00 resistance, but yesterday’s bearish pinbar and close back beneath resistance warn of a bull-trap.
Nasdaq 100 (USTEC): The bias remains bearish below 12,480, although prices have teased Tuesday’s high so a correction may be underway. If a lower high forms on H4 then 11,000 comes into focus.
Ethereum (ETHUSD): Prices have approached the 480 resistance zone. With momentum now slowing we’ll out this onto the back burner before reconsidering new longs.