NZDUSD rally remains attractive to sellers

The New Zealand dollar traded higher recently against the US dollar to trade close to the 0.8690 level. However, the pair is heading towards a critical resistance zone, as can be seen in the 4 hour chart shown below. The pair might move lower again from the highlighted resistance zone. So, I think selling in the short term is a good idea.

Looking at the hourly chart of NZDUSD, the pair has a resistance area at around the 0.8700-20 levels, as can be seen below. There is also a trend line coinciding around the same levels. So, if the pair trades higher from the current levels, moves closer to the mentioned resistance levels and forms a bearish divergence, then we can jump into a sell trade. Remember, the pair needs to stay below the 0.8750 level for this trade setup to be valid.

Initial target should be around the 0.8620 level, and final target could be around the daily 20 moving average. Stop should be placed above the 0.8750 level.

Reviewing yesterday’s events and trades
Yesterday during the European session, the UK employment data was published, which came as a disappointment. This resulted in a drop in the GBPUSD pair. The BOE also lowered their inflation forecast for the UK, which added to the bearish pressure on the pair. Later, the US PPI data was released, which also came better than the expectations. The US dollar was seen trading higher intraday against most of the major currencies.

Fundamental Outlook for the day
Today, there are several important releases scheduled during the NY session, including the US inflation data, initial jobless claims data, Treasury International Capital (TIC) Net Long-Term Transactions data, industrial production data and Philadelphia Federal Reserve Manufacturing Index. Any of these events can cause a lot of volatility in the US dollar. So, we need to be very careful while trading around these events. The US inflation would play a vital role in the current trend. So, trade with caution around this particular event.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, USDJPY, EURGBP, USDCAD, AUDUSD, EURCAD and OIL .
Get it HERE: Vladimir’s Markets Forecast

Trade safe friends. Happy trading!