The New Zealand dollar has traded lower recently against the US dollar as we have been expecting. Now, the pair is trading around a critical support zone, which can produce a bounce in the pair. So, I think buying dips in the short term should be preferred, and once the pair completes the correction, then we can again look to sell later.
Looking at the hourly chart of NZDUSD, there is a major support zone at around the 0.8550-40 levels. If the pair trades closer to the mentioned support zone, makes a stop and creates a bullish divergence, then we can jump into a buy trade. Remember, the last low should hold for this trade setup to be valid.
Initial target should be around the 0.8600, and final target could be around the 0.8630 level. Stop should be placed below the last low.
Reviewing yesterday’s events and trades
Yesterday, during the London session, the UK Consumer Price Index (CPI) data was released. The outcome was more on the positive side. The GBPUSD pair jumped in an early reaction, but later fell back towards the 1.6810 support level. Currently, the pair has been trading higher since morning. Moreover, the AUDUSD is trading lower, as the Westpac consumer sentiment was released earlier, which pointed out a decline in the sentiment. The AUDUSD pair is trading lower and has breached an important support level at 0.9250.
Fundamental Outlook for the day
Today, there are few major risk-events scheduled in the US, including the FOMC meeting minutes and Fed’ yellen speech, which could spark a lot of volatility in the market. So, we need to be careful trading around this particular event. Later during the next Asian session, the Chinese HSBC manufacturing PMI and New Zealand’s inflation expectations data will be published, which can cause some swing moves in the pairs like NZDUSD and AUDUSD. These pairs are already trading lower and any further negative sentiment could take them lower.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, EURGBP, USDCAD, AUDUSD, AUDCAD, USDJPY and OIL.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
