NZD/USD: Seeking To Sell Into Any Rallies Pre-Rate Day
Matt Simpson | Oct 28, 2014 06:05AM ET
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- Whilst moves may be limited leading up to FOMC statement tonight could help provide some tradeable moves if we see enough strength from US data.
- Core Durable expected to tick higher at a time USD rests above key support levels, which may provide decent buying opportunities pre-release to anticipate a positive number.
TECHNICAL ANALYSIS:
NZD/USD: Seeking to sell into any rallies pre-Rate day
There is a thin resistance zone between 0.7911-17 which price is just beneath now. Ideally this will be respected as resistance but may be safer to wait to see if we produce a series of bearish candles below or around this level.
Due to intraday momentum being clearly bullish I would prefer not to fade into this rally just yet and await signs of weakness. Forex is always prone to spikes (especially lower-liquidity pairs such as the Kiwi Crosses) so always allow room for one more high.
If we break up towards 0.794-95 then it invalidates the original bearish wedge highlighted last week so we are running out of room for gains to sell into. However I suspect that any gains seen before Thursday morning are traders positioning themselves for this volatile session, and due to my outlook being USD bullish and NZD bearish, I am anticipating an unwinding of these positions on Thursday AM, hence the bearish bias leading up to this event.
USD/CAD: Buy the dip but potential for a correction
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There have been few catalysts for USD or CAD recently but price is grinding higher and producing higher highs/lows. Going into London open I suspect we will make an attempt to challenge 1.126 and how price reacts here is key.
If this level remains to cap as resistance then we can seek a break of a swing low (or the trendline) to trade a Bearish Wedge pattern. A break above 1.126 however could be classified as a breakout to a new range, to target 1.1280.
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