Yesterday, was an important day for the NZDUSD pair, as the RBNZ announced a rate hike of 0.25%. The NZDUSD pair traded higher above the 0.8540 level after the announcement. One important thing to note here is that the pair has breached a critical trend line, as can be seen in the daily chart shown below. I think this break is critical, and the pair should continue to trade higher after a small correction or retracement.
Looking at the 4 hour chart of NZDUSD, there is an important up-move trend line, as plotted on the chart shown below. There is a crucial support area at around the 0.8510 and 08480 levels. These levels also coincide with the up-move trend line. So, if the pair moves down from the current levels, stops around the mentioned levels and forms a bullish divergence, then we can jump into a buy trade.
Initial target should be around the 0.8590 level, and final target could be around the 0.8640 level. Stop should be placed below the trend line and support level.
Reviewing yesterday’s events and trades
The Asian session was an interesting one, as a lot of moves were seen in the market. There were two major economic releases scheduled, including the RBNZ interest rate decision and Australia’s jobs report. The RBNZ announced 0.25% rate hike, as expected. This resulted in a sharp spike higher in the NZDUSD pair. Later, the Australia’s jobs report was published, which again impressed the market. The Australia’s employment change jumped to 47.3K, beating the expectations of the 18.0K. The previous reading was also revised up. This resulted in nice gains in the AUDUSD pair. The EURUSD pair also traded to new three year high in the Asian session.
Fundamental Outlook for the day
Today, the US retail sales, core retail sales, initial jobless claims, the import price index and Federal budget balance data will be released. The market is expecting improvement in the retail sector in the US. So, if the outcome is positive, then we can witness a relief rally in the US dollar. On the other hand, if the outcome misses the expectations, then further slide is possible in the US dollar. Later in the next Asian session, the New Zealand’s Business PMI and BOJ’s Monetary policy meeting minutes will be released. One can anticipate some movements around these events.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, EURCHF, AUDUSD, AUDJPY and OIL.
Get it HERE: Vladimir’s Markets Forecast
Trade with caution friends. Happy trading!
