The New Zealand dollar is trading lower intraday after softer than expected CPI figures for the New Zealand. The buyers are seen under pressure, and I think the down-move might continue in the days to come. So, selling rallies is a good option in the short term.
There is an important down-move trend line on the hourly chart, connecting all major previous lows. There is also a resistance at around the 0.8630/40 levels. If the pair retraces from the current levels, and trades closer to the highlighted resistance zone, then we can jump into a sell trade. Remember, we need the pair to trade below the trend line for this trade setup to be valid.
Initial target should be around 0.8520 level, and final target could be around the 0.8450 level. Stop should be placed above the hourly trend line.
Upbeat US Retail Sales and CPI Report
On Monday, the US retail sales data was published, which registered a sharp rise of 1.1%. This resulted in a rally for the US dollar. Yesterday, the US CPI figures were also released, which came better than expected. The US dollar is trading higher against most of the major currencies. The Euro is especially trading lower, as the ECB officials keep on commenting on the Euro strength. The EURUSD pair traded lower, and almost tested the 1.3800 level yesterday. The GBPUSD pair also traded a touch lower towards the 1.6700 support level. The Australian dollar is also trading lower after the recent RBA minutes. The majors as of writing are trying to recover the lost ground.
US Inflation Report
Today, there is an important event scheduled in the NY session. The Fed chairman Yellen will be speaking later during the day, which can act as a catalyst in the short term for the US dollar. Any positive comments can help the US dollar further, and any negative remarks could weigh on the dollar. Almost all major pairs are trading around critical levels, and any reason for volatility might trigger crucial breaks in the medium term. So, we need to be very careful moving ahead.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURGBP, USDJPY, EURJPY, EURCHF, USDCAD, GOLD and OIL.
Get it HERE: Vladimir’s Markets Forecast
Trade safe friends. Happy trading!
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