NZD/USD: Buying Around Swing Support Areas Preferred
Vladimir Ribakov | Jun 30, 2014 06:56AM ET
Buying around swing support areas preferred in NZD/USD (extract from Weekly Market Forecast 29th of June 2014)
The New Zealand dollar continues to outperform against several other currencies, including the US dollar, the Euro and the Australian dollar. There might be some retracement from the current levels, but those corrections might be seen as a buying opportunity. So, I think every drop down could present us a nice buy opportunity in the medium term.
There are several supports on the way down for the NZD/USD pair, as can be seen in the daily chart shown below. Initial support is at around the 0.8680 level, followed by 0.8650. So, if the pair falls closer to the highlighted support areas on the daily chart and makes a stop, then we can jump into a buy trade. Remember, the pair must continue to trade above the 0.8520 support area for this trade setup to be valid.
Initial target should be around the 0.8800 level, and final target could be around the 0.8900 level. Stop should be placed below the 0.8520 level.
Major events scheduled in the upcoming week
The US dollar was seen trading lower this past week, as the market sentiment favored sellers in the short term. There was nothing much to talk about on the economic release front. The data which came out of the US was mostly mixed, as the home sales data came better than expected and durable goods orders data fell slightly. So, overall the US dollar traded lower this past week, especially against the Euro and the Japanese yen. The USD/JPY pair broke an important support area to trade lower, and the EUR/USD pair managed to close the week above the 1.3620 support level.
Let us look at all major events lined up in the upcoming week.
Sunday – Japan industrial production data.
Monday – German retail sales, Euro zone CPI, Canada GDP, Chicago PMI, US pending home sales data and Chinese manufacturing PMI.
Tuesday – RBA interest rate decision, German unemployment data, German manufacturing PMI, Euro zone manufacturing PMI, UK manufacturing PMI, Euro zone unemployment data, US ISM manufacturing PMI and Australia’s trade balance data.
Wednesday –Euro zone GDP data, US ADP nonfarm employment change data and Australia’s retail sales data.
Thursday – Spanish services PMI, German services PMI, Euro zone services PMI, French services PMI, Italian services PMI, UK services PMI, ECB interest rate decision, US NFP data and US unemployment rate.
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Friday –German factory orders data and Euro zone retail PMI data.
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