The NZDUSD is coming closer to a critical resistance area, in my opinion, and the buyers might struggle around the 0.8360 and 0.8380 levels. There is also a major resistance at around the 0.8380/90 level, as can be seen in the 4 hour chart shown below. There is also a bearish hidden divergence on the 4 hour, which supports our bearish view in the short term. So, I think we should look for sell opportunities.
Looking at the hourly chart of NZDUSD, there is a resistance at around 0.8350/60 levels, as mentioned earlier. Once the pair pushes a bit higher from the current levels and creates a divergence on the hourly chart, then we can enter into a sell trade.
Alternatively, there is an up-move trend line, as can be seen in the chart below. There is also a support at around the 0.8310 level. Once the pair breaks the trend line and support level, and settles below, then we can jump into a sell trade. Remember, we need a double break for this scenario to be valid.
Initial target should be around the 0.8220 level, and final target could be around the 0.8160 level. Stop should be placed above 0.8400 in the first scenario, and above the broken trend line and support for the second scenario.
Reviewing yesterday’s events and trades
Yesterday, in the European session, the German IFO business climate index was released, which jumped higher from 110.6 to 111.3. Later, the Euro zone CPI data was released, which registered a 0.8% growth rate beating the expectations of the 0.7%. This helped the EURUSD initially, but later the pair failed again at around the 1.3760/70 level and traded lower. In the NY session, the US services PMI figures were released, which missed the expectations of 56.9, and registered a reading of 52.7. This outcome weighed on the US dollar, and the pairs like AUDUSD and NZDUSD traded higher in the NY session.
Fundamental Outlook for the day
Today, in the NY session, the Conference Board (CB) Consumer Confidence and the S&P/Case-Shiller House Price index will be released. The market is expecting 0.7 points decline in the CB consumer confidence from 80.7. Any lower than expected reading should take the US dollar down. However, a better outcome might help the US dollar in the short term. Later, the RBA Governor Stevens will be speaking. This can be a market moving event for the Australian dollar. So, keep an eye on his comments if you are planning to trade any AUD pairs.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, USDCAD, USDJPY, EURCHF, AUDUSD, OIL and GOLD.
Get it HERE: Vladimir’s Markets Forecast
I wish everyone a great green week. Happy trading friends!
