NZD/USD Rally Remains Attractive To Sellers
Vladimir Ribakov | May 15, 2014 05:59AM ET
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 the NZD/USD, 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.
h3 Yesterday's Events:/h3Yesterday during the European session, the UK employment data was published, which came as a disappointment. This resulted in a drop in the GBP/USD 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.
h3 Market Outlook:/h3Today, 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.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.