Buying Valleys in NZDUSD (extract from today’s Market Forecast)

In Yesterday’s Daily Forecast video, I mentioned the importance of upcoming FOMC Minutes. It did turn out to be a major event, and we saw some significant turns in some of the major pairs. In FOMC minutes, we were given further hints that QE taper can begin as early as in September. Almost all members agreed and supported the taper timeline laid by Fed chairman Ben Bernanke. As a result, we saw US Dollar gain across the board, especially against NZD, JPY, CAD and EUR.

We would be very careful with any trade setups today and tomorrow as we have Jackson Hole and no one is sure about outcome from this event.

However, I do have a trade setup for today. In our daily forecast, I have been anticipating a down move in NZDUSD, which we finally got. Now, we are looking to buy the Valleys in NZDUSD. We have a trend line on the daily chart as shown below. We are therefore looking to buy NZDUSD from this particular trend line. There are several support levels just around this trend line which if holds can push NZDUSD to the upside.

There may be two ways to buy NZDUSD. If we get a push to the downside, then we are looking to buy from levels such as 0.7810, 0.7800 and 0.7780 along with a bullish candle pattern and MACD changing to the bullish side again. Alternatively, if NZDUSD does not drop lower, then we will wait for the trend line and resistance as plotted on the 1H chart to break for a long trade to trigger. Initial target would be 4H 20 MA, and final target should be around daily 20 MA. Stop should be triggered on 1H close below the daily trend line.

Today, we have some events, which can add to volatility as we are close to end of the week. We have Canadian retail sales data, US Initial Jobless claims figures, FOMC member Fisher’s speech and Treasury Secretary Lew’s speech later in the US session. Any decline in jobless claims will add to taper speculation, and can prove to be US Dollar positive.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCAD, AUDNZD and DOW JONES.
Get it HERE: Vladimir’s Markets Forecast

Trade well friends. Happy trading!