The New Zealand Dollar started a bullish rally recently against the US Dollar, which is more because of the latter
one weakening against major currencies. The NZD/USD pair may continue to trade higher in the near term, but we
should not over expose while trading this pair. The RBNZ mentioned and reiterated time and again that they will
take all necessary measures to keep a check on the NZD exchange rate.
If we look at the daily chart of the NZD/USD pair, then there is a chance of it heading towards the 0.7150-0.7200
area where sellers may appear. The pair is likely to complete a bullish cycle around the stated level and might find
offers.
So, I think we should be looking for a buy opportunity in the NZD/USD pair in the short term. In order to trade it we
can look for an opportunity and scenario on the 4-hours chart.
Technical Analysis
D1 – The daily chart of the NZD/USD, highlighting a scenario in which the pair can trade towards the 0.7150-0.7200
resistance area.
Buy Entry:
H4 – I think we should not rush to enter a trade in NZD/USD. There is a bullish trend line formed on the 4-hours
chart of the NZD/USD pair, which may act as a support and a buy zone in the short term.
So, if the pair moves down or corrects lower in two waves to trade near the highlighted trend line and support
area, makes a stop and forms a bullish divergence, then we can enter a buy trade.
Target 1: 0.7050
Target 2: 0.7120
Stop Loss: 15 pips + below the last low created before entering the trade OR below the trend line support area on
Fundamentals events and Economic news to watch out
There were a few economic releases during the Asian session, which impacted the New Zealand dollar and the
Australian Dollar. They both traded down and were seen trading with a bearish bias. This means the highlighted
correction in NZD/USD is underway and may present us a buy opportunity.
Today in Australia, the Retail Sales, which is a survey of goods sold by retailers is based on a sampling of retail
stores of different types and sizes was released by the Australian Bureau of Statistics. The market was poised for
an increase of 0.4% in sales in Feb 2016, compared with the previous month.
However, the outcome was disappointing, as there was no change in sales in Feb 2016. The report added that “The
following industries rose in trend terms in February 2016: Clothing, footwear and personal accessory retailing
(0.7%), Household goods retailing (0.3%), Food retailing (0.1%), Cafes, restaurants and takeaway food services
(0.1%) and Department stores (0.2%). Other retailing (0.0%) was relatively unchanged in trend terms in February
2016”.
Moreover, the ANZ job advertisements released by the Australia and New Zealand Banking Group Limited (ANZ)
posted a rise of 0.2% in March 2016, compared with the last decline of 1.2%.
Let us wait for the pair to correct down to enter as per our plan in NZD/USD.
Good Luck with trading traders!
Yours,
Vladimir
