Today we will have a look at NZDUSD, which can present an excellent sell opportunity as I think the pair can form a short term top soon as the pair has several critical resistances on the daily chart as shown below. We also have an opening week gap, which I think can be closed by the end of the week.
One way to trade NZDUSD can be to enter a sell from the next resistance at around 0.8250 or 0.8280 as shown on the daily chart above. Once the pair makes a stop at any of these resistances, and forms a bearish candle pattern on the 1 hour chart along with divergence on the 4 hour chart, then we will jump into a sell trade.
Alternatively, there is an up-move trend line as plotted on the 4 hour chart shown below. If the pair breaks and closes below the trend line and immediate support at around 0.8160, then we can enter a sell trade for NZDUSD.
Initial target could be the gap close or around the next trend line as plotted on the 4 hour chart below, and final target could be the daily 20 moving average. Stop should be placed above the previous high in both the cases.
Reviewing yesterday’s events and trades
NY Empire State Manufacturing Index released yesterday, fell to new lows of 6.29 from the previous of 8.24. Market was expecting a better reading of 9.20, and thus US dollar declined against most of the major currencies. Other than this, US industrial production data was measured as expected with a gain of 0.4%. All the major currencies are still trading above the gap, and I expect the gaps to be filled sooner or later in the week.
Fundamental Outlook for the day
Some of the key fundamental events that are scheduled later in the US session include US Core Consumer Price Index (CPI), Treasury International Capital (TIC) Net Long-Term Transactions data and National Association of Home Builders (NAHB) Housing Market Index. Core CPI figure would be important in order to evaluate further the possibility of QE taper later in the FOMC meeting. Market is not expecting any major change from the last reading, and any surprise to the downside may weigh heavily on the US dollar in short term. Other than this, Canadian manufacturing sales data is also lined up, which is expected to show gains of 1.0% as compared to the previous reading of -0.50%.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, NZDJPY, EURNZD, EURCAD, AUDNZD, GOLD and SILVER.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
