After the RBNZ interest rate decision, the NZDUSD pair has come under severe pressure. The pair broke an important support level of 0.8200 level, and traded lower. Now, I think the bearish pressure is intact for the pair, and it can continue to trade lower in the coming days. So, either we should look to sell a break or sell rallies in the pair. The pair is currently holding a major support level, as can be seen in the daily chart below.
The broken support level at around 0.8200/10 may now act as a resistance for the pair. So, we should look to sell NZDUSD if the pair attempts to rally around the same level, as highlighted in the 4 hour chart shown below. Alternatively, if the pair breaks the support level as shown in the daily chart above, closes below it, then we will enter into a sell trade when the pair attempts to re-test the broken support level. The pair needs to close below the support level in order for this setup to be valid.
Initial target should be around the 0.8000 level, and final target could be around the 0.7900 level. Stop should be placed above the broken support level.
Reviewing yesterday’s events and trades
Yesterday, the USD GDP data was released, which came in line with the expectations. However, later during the NY session, the pending home sales data was released, which missed the expectations. The US pending home sales registered a healthy decline of 8.7%. There is not much of the reaction from the market. All the major pairs are trading in a range ahead of the weekend. Other than this, the Japan’s inflation data was also released in the Asian session, which came as expected.
Fundamental Outlook for the day
Today in the European session, the Euro zone’s inflation and unemployment data will be released, which can act as a catalyst for the Euro pairs. Later, during the NY session, the Canadian GDP data will be released along with the US personal spending figures, Chicago PMI, Michigan consumer sentiment an employment cost index data. There can be some moves, as today is the last trading day of the week and January. So, we need to be very careful while trading, and try not to jump into any unnecessary and risky trades.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, EURGBP, USDCAD, EURJPY, GBPJPY, EURAUD and OIL.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
