NZDUSD about to form next short term top?

Hi Friends,

US Dollar again lost some significant ground yesterday as the US CPI data missed expectations. There was selling pressure noted in NY session, which continued in Asian session earlier today. I expect USD to correct in coming sessions, especially against EURUSD and NZDUSD.

NZDUSD benefited the most from USD selling, and NZDUSD climbed as high as 0.8050 yesterday and at the time of writing trading at about 0.8080. I am expecting some short term top to form in NZDUSD, then we will look to enter a short trade. There are some key resistances in the area 8090 and 8120 as shown in the 4H chart below. There is also a short term descending trend line which can pause this NZDUSD rally.

There is also 100 day MA (Moving average) and 200 day MA above 8100, which can act as a significant resistance for NZDUSD as shown in the chart below. So, we are looking to form a short term top in NZDUSD from these areas. First, either we will be looking for a double to form at around 8110, or we will be waiting for the pair to either test 100 day MA or 200 day MA, then we will look for a sell opportunity. We need to enter carefully, and thus will look for our bearish candle pattern along with bearish hidden divergence on the 4H chart in combination with continuous divergence on the 1H chart.

If our trade get triggered from 8100 zone, then our first target would be 8060 and secondary target would be 20 MA on the 4H chart. And, if our trade triggered from bit higher from 200 day MA, then our first target would be 20 MA on 1H chart and secondary would be 20 MA on 4H chart. I think once we begin the bear leg, then we can also test weekly low again, which can be our final target.

We have some key fundamental releases in NY session today starting with Core CPI figures, Initial jobless claims and NY Empire state Manufacturing Index followed by US Industrial production and Philadelphia Fed Manufacturing Index. There can be significant volatility in NY session, so be careful before getting into a trade.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURAUD, USDCAD, GBPCHF, AUDUSD, AUDNZD, SILVER, OIL and EURCHF.

Get it HERE: Vladimir’s Markets Forecast

Enjoy friends. Happy trading!