RBNZ & BOC Rate Decision, Mastering Weekly Analysis, NZD Pairs Ready To Rock

Good morning, ambitious traders! Let's make this week count by staying informed and making wise trading decisions.

Here’s what we have covered today:

☕UK Labour Market, RBNZ, BOC and US Inflation Reports

☕Mastering Weekly Market Analysis

☕NZD Pairs Ready to Rock It

🗞️Movers & Shakers🗞️

UK Labor Market in Focus: Jobs Data and Wage Growth Could Influence BOE's Policy Path On July 11 at 6:00 am GMT, the release of the UK's jobs data will capture market attention. Analysts expect a net addition of 20.5K jobless claimants in May, while the unemployment rate is projected to remain steady at 3.8% for the month. However, the key focus will be on wage growth. Average earnings (excluding bonus) are forecasted to cool to 7.0% in May from the post-pandemic record high of 7.2% in April.

Weaker wage growth would support the view that pay growth has peaked and could lead to speculations of a less hawkish monetary policy stance by the Bank of England (BOE). This could potentially weigh on the British pound (GBP) as it signals a potentially slower pace of future interest rate hikes.

RBNZ Set to Pause: Decision Day for Reserve Bank of New Zealand On July 12 at 2:00 am GMT, the Reserve Bank of New Zealand (RBNZ) is expected to keep its rates unchanged at 5.50%, following the footsteps of the Reserve Bank of Australia (RBA) in pausing its rate hike cycle.

The anticipation of a rate hike pause by the RBNZ may limit the immediate reaction of the New Zealand dollar (NZD) to the actual event. However, the overall risk sentiment and the hawkishness conveyed by central bank officials during the announcement could still generate volatility in the NZD.

US Inflation Reports: CPI and PPI Data to Shape Fed's Hawkish Stance On July 12 at 12:30 pm GMT, the release of the US Consumer Price Index (CPI) reports will be closely watched. Traders anticipate a slowdown in headline inflation from 0.4% month-on-month (m/m) to 0.3% m/m in June, with the annualized rate expected to decrease from 4.0% to 3.2%. The core annual inflation rate is also projected to decline from 5.3% to 5.0%. Additionally, on July 13 at 12:30 pm GMT, the Producer Price Index (PPI) data will be released, with annualized PPI and core PPI expected to decrease.

Weaker-than-expected inflation readings could raise doubts about the pace of future rate hikes by the Federal Reserve. This could potentially weigh on the US dollar (USD) as it reduces the likelihood of a more aggressive monetary policy stance.

BOC's Policy Decision: Bank of Canada Eyes Another Rate Hike On July 12 at 2:00 pm GMT, the Bank of Canada (BOC) will announce its monetary policy decision. Market expectations are for another 25 basis points rate hike, bringing the interest rate to a 22-year high of 5.00%. This follows a pause in rate hikes in the previous meetings held in March and April before implementing one in June.

A rate hike by the BOC would likely strengthen the Canadian dollar (CAD) as it signals confidence in the Canadian economy and potentially attracts foreign investment. However, the reaction of the CAD will also depend on the statements and forward guidance provided by the BOC members during the announcement, as well as the market's assessment of Canada's labour market conditions.

Economic Calendar

Mastering Weekly Market Analysis

Imagine having a clear plan and laser-like focus as you navigate the vast world of currency trading. It's possible with a strategic approach to market analysis. By dedicating time on Sundays or Mondays to conduct your analysis, you can create a concise watchlist of 3-5 currency pairs for the week. This targeted approach helps prevent overwhelm and enables you to stick to your trading plan with greater ease. Let's delve into the benefits of streamlining your watchlist and how to master the art of weekly market analysis.

The Power of Weekly Market Analysis: Performing market analysis at the beginning of the week sets the foundation for your trading decisions. By analyzing the charts, economic calendar, and key events, you gain a comprehensive view of the market landscape. This bird's-eye perspective helps identify potential trends, patterns, and significant support/resistance levels, allowing you to align your trading strategy with the most promising opportunities.

Streamlining Your Watchlist: With a plethora of currency pairs available for trading, it's essential to streamline your watchlist. By selecting 3-5 pairs to focus on each week, you can dedicate your time and attention to these specific markets. This approach minimizes distractions, reduces information overload, and enhances your ability to analyze and monitor your chosen pairs thoroughly. Remember, quality over quantity is the key to success.

To create an effective watchlist, consider a variety of factors:

• Start by identifying the major currency pairs that align with your trading strategy and offer high liquidity.
• Analyze the economic calendar to highlight upcoming events, such as central bank announcements or significant economic releases that may impact your selected currency pairs.
• Utilize technical analysis techniques to identify potential trade setups, trends, and key levels of support and resistance.
• Consider correlations between currency pairs, as it's beneficial to have a mix of positively and negatively correlated pairs on your watchlist.

Sticking to Your Plan: Once you've crafted your watchlist, it's crucial to stick to your plan throughout the week. Resist the temptation to deviate from your selected pairs and maintain discipline in executing your trades. By staying focused and trading the setups that align with your analysis, you increase the likelihood of consistent profitability and reduce emotional decision-making.

Action Steps:

1️⃣ Schedule dedicated time on Sundays or Mondays for your weekly market analysis.

2️⃣ Select 3-5 currency pairs that align with your trading strategy and offer favourable trading opportunities.

3️⃣ Conduct a thorough technical and fundamental analysis of your chosen pairs, considering key levels, trends, and upcoming events.

4️⃣ Use trade management tools and proper risk management techniques to ensure disciplined execution of your trades throughout the week.

SIP, LAUGH, TRADE 😁

📈LATTE LINEUP📈

-EURNZD-

HTF(Daily): Previously, the price formed a new high point before a retracement, bringing the price back to retest the previous daily high and resistance level, which now serves as a potential support zone. The retest is in alignment with the golden pocket and the 70.50% Fibonacci retracement level, which enhances the setup with additional confluence. A notable development within this setup is the formation of a clean bullish rejection candle. This candle signifies a strong resurgence of buyer interest, as evidenced by the increased volume at this level. It points to the potential continuation of an upward move in the market.

To gain deeper insights and explore the evolving market structure, it's time to shift our focus to a shorter time frame.

LTF(1-HR): The price action on the lower time frame (LTF) indicates a period of consolidation or sideways movement following the rejection observed on the higher time frame (HTF). To initiate a long position, we are closely monitoring a potential breakout above the marked highs.

For the entry trigger, we seek confirmation through a break of the highs, followed by a retest of these levels. This retest should be validated by the presence of candlestick rejections or engulfing patterns, signalling a strong buying interest. To manage risk, we suggest placing stop-loss orders below the previous low. As for the targets, we aim for the previous HTF high, which is aligned with the daily level.

As the price action evolves, maintain a watchful eye on the charts, ready to execute the long position once the breakout and subsequent retest are confirmed. Remember to adjust your analysis based on the evolving market conditions.

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-AUDNZD-

HTF(12-HR): The price action indicates a bearish trend, highlighted by the formation of a new lower low on the higher time frame (HTF). This suggests a continuation of the downward movement in the market. To position ourselves for potential short trades, we are patiently waiting for a pullback that will allow the price to retest the previously broken 12-hour support as a resistance level. This area of interest coincides harmoniously with the 50% Fibonacci retracement level, adding an extra layer of significance to the setup.

As the price develops, it is crucial to monitor the lower time frame for signs of selling pressure around the retest zone. These signs may manifest in the form of bearish candlestick patterns or other indications of bearish momentum. Stay tuned for the entry game plan, which will be shared in the Nexus Hub as the setup unfolds.