Eyeing NZDUSD for a sell opportunity (extract from today’s Market Forecast)

A big event shaped recently as the US government shutdown occurred after the Congress failed to reach an agreement on the budget bill. US dollar may move down heavily if a resolution is not reached soon. Speaking of trade opportunity for today, we have an interesting setup for NZDUSD. On the daily chart, MACD is sloping down and pair is rising as shown below, which is a strong bearish sign, in my opinion.

Looking at the 4 hour chart of NZDUSD, there is a flag forming after the drop down. Now, to enter a sell trade we need the pair to break the flag and support at around 0.8260/50. If the pair breaks below and hold, then we will enter a sell trade for NZDUSD. Remember, market is expected to be very volatile in coming sessions, and we do not want to trade false breaks. So, a convincing break is required to be in a trade.

Initial target could be all the way for the gap close at around 0.8120, which will also be the duplication as shown in the chart below. Final target could be the next major support of 0.8060. Stop should be placed above the previous resistance after entering the trade.

Reviewing yesterday’s events and trades
US Chicago PMI released yesterday, which jumped to 55.7 from the previous reading of 53.0. Canadian GDP registered a growth rate of 0.6% missing the expectations of 1.0% and Chinese manufacturing PMI too missed the expectations of 51.5 with a reading of 51.1. US dollar traded lower yesterday as the US shutdown was looming around. AUDUSD jumped higher as RBA kept the interest rates unchanged and the statement was not that dovish.

Fundamental Outlook for the day
Starting today US government closed its doors as the Congress fails to reach a decision on spending budget bill. Such an event happened after a period of almost two decades. US dollar may suffer in the short term unless a solution is reached. It would be very interesting to see how investors react to this event as the time passes. US ISM manufacturing index is due later in the day, which is expected to decline a bit from the previous reading. German employment data was released earlier in the EU session, which missed the expectations badly and weighing on EURUSD.

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

Trade safe friends. Happy trading!