For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Trading plan for November 27
The economic calendar today is full of the events from the US. The most significant out of them is the American CB consumer confidence. It will be released at 5 in the afternoon MT time Last month it reached a higher-than-expected level of 137.9 points. Analysts anticipate a slight decline to 136.2 points in November. If the actual digits are higher, the USD will be supported.
As for the NZD, at 10 in the evening we are awaiting the Reserve bank of New Zealand to publish its financial stability report. We will see if the central bank provides any hints for changing its dovish tone due to the increased inflationary and employment data.
Let’s examine the charts.
Yesterday, fresh comments by US president Donald Trump on raising tariffs in Chinese imports resulted in gains of the US dollar index. However, it could not break the psychological level of 97. If today’s release outperforms the forecast, the USD can stick above the resistance at 97. Otherwise, it will fall to the support at 96.55 which lies near the 100-day MA.
Trump’s comments made the New Zealand dollar to fall below the 100-MA on a 4-hour chart. However, the pair managed to recover. If the RBNZ report is hawkish, we can expect the pair to rise towards the resistance at 0.6806. In case of the strong USD, the pair will drop to the support at 0.6738.
From the technical side, an inverted candlestick was formed on a daily chart. It can mean a potential reversal, however, you should take into account other factors.
As for USD/JPY, the pair was a big gainer yesterday. It crossed the 50-day MA and the 113 level. If the USD extend its gains today, the pair will manage to stick above the resistance at 113.64. If the USD disappoints the investors, it can fall below the support at 113.29.
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
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