The New Zealand dollar is on the rising streak for the last couple of weeks. The NZDUSD pair recently traded above the 0.8620 level, but failed to gain momentum above it. The pair is retracing some of the recent gains. I think the up-trend is far from over. So, we should be looking for short term buy opportunities.
There are two up-move trend lines, as can be seen in the 4 hour chart shown below. There are chances that the pair might bounce again from the recent trend line. Once the pair reaches around the trend line, stops and created a bullish divergence on the lower time frame, then we can enter into a buy trade.
Alternatively, there is a down move trend line, as highlighted in the 15 minute charts shown below. If the pair climbs higher, breaks the trend line convincingly, then also we can jump into a buy trade.
Initial target should be around the last high, and final target could be around the 0.8800 level. Stop should be placed below the trend line and support level in the first scenario, and below the broken trend line and resistance in the second scenario.
Reviewing yesterday’s events and trades
Yesterday, in the European session, the German and the Euro zone ZEW economic sentiment were released. The outcome was very disappointing as sentiment for both the Germany and the Euro zone fell to 46.6 and 61.5 respectively. The EURUSD fell after the data release, but managed to recover the ground after some time. Later, in the NY session, the US inflation data was released. The outcome was in line with the expectations with CPI (MoM) increase of 0.1% in February. The US dollar was seen trading a touch lower after the release.
Fundamental Outlook for the day
Today is an important day as the Fed interest rate decision is lined up in the NY session. The market is expecting the fed to taper one more time by $10B. If the Fed decides to taper, then the US dollar could rise in the short term. On the other hand, if they decide to wait for some time, then the US dollar could trade lower against most of the major currencies. We need to keep a close eye on this event, as a lot of swing moves are expected around this event. An unexpected outcome can cause jitters in the market, and could create a lot of volatility.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, EURGBP, USDCAD, EURCHF and USDJPY.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
