The New Zealand dollar traded lower against the US dollar earlier today, as the CPI release in the New Zealand came as a disappointment. I think there is a lot of room towards the downside, and the NZDUSD pair can move further lower from the current or a bit higher levels. So, I think we should be looking for sell opportunities in the short to medium term.
There was a bullish trend line formed on the hourly chart of the NZDUSD pair, which was breached recently and the pair traded lower. There is an important resistance forming around the 0.7880-90 levels, which acted as a support earlier. So, if the pair corrects higher from the current levels, moves closer to the mentioned resistance area and forms a bearish divergence on the lower timeframe, then we can enter into a sell trade.
Initial target should be around the 0.7810 level, and final target could be around the 0.7760 levels. Stop should be placed above the 200 (4 hours) moving average.
Reviewing recent events and trades
The US dollar stormed higher against a basket of currencies yesterday, including the Euro and British pound. One of the main reasons for the rise in the US dollar was better than expected consumer price index reading in the US. This lifted the mood of the dollar buyers, and it surged higher. The EURUSD pair was down and traded as low as 1.2632. Moreover, the NZDUSD pair fell sharply during the Asian session, as the New Zealand consumer price index missed the market’s expectation.
Fundamental Outlook for the day
Today, the US initial jobless claims, manufacturing PMI and Bloomberg consumer confidence data will be released during the NY session. Today, there are a lot of important economic releases, which could affect the US dollar to some extent. So, the pairs such as EURUSD and GBPUSD are on the watch list, as there are chances that we might witness swing moves in the pairs. Moreover, the New Zealand trade balance data will be released during the next Asian session, which might impact the NZDUSD pair.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
