Focus on the Banks of England and New Zealand

Fundamentals

By the time this survey is published, the Bank of New Zealand will have already decided on its discount rate. Unfortunately, we can’t yet say what it will be, but we think that there will be no surprises from the RBNZ and that the rate will stay at 1.75% p.a. The Bank’s press conference with the appropriate commentary about the interest rate was held at 10:00 pm GMT, and at 1:10 am GMT Graeme Wheeler, the Bank of New Zealand’s governor, spoke.
But the day of meetings will not end there. The Bank of England will meet today at 11:00 am GMT, and the monetary authorities will also decide on the base discount rate. The majority of analysts predict that the rate will remain unchanged at 0.25%. Besides, don’t forget that the BOE’s soft monetary policy is good for the Brexit. Time will tell. England’s latest macroeconomic indicators look like this: labor market indicators are better than last year (UK unemployment is 4.7% compared to last April’s number of 5%), and inflation is holding steady at 1.8% p.a.
Regular data on the number of jobless claims comes out at 12:30 pm GMT. The number of initial claims is predicted to rise to 245,000.

Stocks

There is unlikely to be anything of interest among US corporate reports today. Traders on the NYSE might try to trade on the Nordstrom Inc. report. Three black crows, a candlestick pattern indicating a trend reversal, can be seen on the daily charts for the company’s shares. Bearing in mind Elliott’s wave theory, traders will be watching for the reversal’s target (if there is a reversal, of course). If the price moves below $46.50, we can rule out that the company’s shares are in a trend impulse.
The DJIA might form a pattern that is not found on the market very often, namely a bull trap. On the daily charts the MACD is intersecting the signal line top down, sending a sell signal. The target for the decline could be the closure of two gaps up, i.e., movement toward 20,600 points.
The Russian MICEX Index is forming an inverted head-and-shoulders pattern. The neckline is at 2040 (2050) points. If it is confirmed, the target for the index’s rise might therefore be 2190 points. If there is a correction downward, the support might be the 9-day MA at 2000 points.

Currency Market

Graphically, the CAD/JPY pair is approaching the descending price channel’s resistance. This is accompanied by an intersection of the upper Bollinger band. If a confirming down signal is received, traders will likely put on shorts with a target of 80 yen per loonie. The signal might, for example, be the return of the Williams %R to normal territory after the upper level is intersected top down.
The USD/SDG is still positive on the daily charts. The EMA is headed up, signaling a bullish trend. However, pay attention to the reversal of the Williams %R, which is still sending a weak reversal signal. Like the Williams, the RSI is also reversing. The upper boundary, however, has not been intersected, so the signal is not very strong. On the weekly charts the pair is near the middle Bollinger band, which is still serving as the resistance level. If there is a breakthrough, the upward movement may continue, with a mid-term target of 1.4400.

Nikolay Dudchenko, Olymp Trade analyst

Olymp Trade Review