The New Zealand dollar recently traded lower against the US dollar and traded as low as 0.7697. The NZDUSD pair is currently correcting higher, but the upside should be limited considering the present bearish pressure on the pair. I think selling rallies remain a good option in the short term and we should be looking for the right entry moving ahead.
There is a bearish trend line formed on the hourly chart of the NZDUSD pair, which might act as a hurdle in the short term. There is also a gap area around the 0.7800 level, which could act as a resistance. So, there is a confluence resistance zone around the mentioned area. If the pair moves higher from the current or a bit lower levels closer to the mentioned area, makes a stop and forms a bearish divergence, then we can enter into a sell trade.
Initial target should be around the 0.7750 level, and final target could be around the 0.7720 levels. Stop should be placed above the 200 hourly moving average.
Reviewing recent events and trades
Yesterday, there were several events scheduled both during the NY and the London session. The main ones were the Euro zone manufacturing PMI and the US ISM manufacturing PMI. The US ISM manufacturing PMI was the highlight of the day, as it exceeded the market expectation and came in at 59.0. This resulted in a spike in the US dollar, but later the pairs such as EURUSD and GBPUSD managed to recover the ground. The AUDUSD is also trading higher despite the fact that the RBA kept their stance as dovish.
Fundamental Outlook for the day
Today, there are less important releases in the US. The important one to keep an eye on is the US trade balance and factory orders data. The market is expecting the US factory orders to improve a bit from the last time. So, let us see how the outcome shapes up and affects the US dollar. If there is a miss, then there is a chance of a correction moving ahead. Moreover during the next Asian session, the New Zealand’s unemployment data will be published which might impact the New Zealand dollar pairs to a great extent.
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!
