NZD/USD: consolidation around local highs
Current trend
Yesterday New Zealand dollar was moderately growing against US one and renewed maximum since October 17. However, the instrument could not consolidate at the new highs. By the end of the trading session, the pair has returned to red zone due to expectations of the further Fed’s interest rate growth in 2018.
In the morning, the pair is trading in the different directions. It has fallen in the opening of the session partially due to the Chinese statistics: December growth of the consumer inflation had not met the traders’ expectations. It grew by 0.3% MoM, while +0.4% MoM was expected, and by 1.8% YoY, while +1.9% YoY was supposed. Still, the fall has been balanced.
The investors are now waiting for new drivers, such as commentaries of Fed's officials, to appear.
Support and resistance
On the daily chart, Bollinger Bands are steadily growing. The price range is narrowing from below, reflecting the flat dynamics appearance in the beginning of the current trading week. It is better to open short positions, focused on the fast correction of the instrument to the area of the middle line of the indicator.
MACD is slightly reversing downward, ready to form a sell signal (the histogram should be below the signal line). It is better to wait until sell signal is confirmed.
Stochastic's dynamics is the same; it is ready to break down the level of 80. Current indicator’s readings reflect that NZD is overbought in the short term.
Resistance levels: 0.7195, 0.7215, 0.7242.
Support levels: 0.7135, 0.7100, 0.7053, 0.7032.
Trading tips
Long positions can be opened after the breakout of the level 0.7195 or 0.7215 with the targets at 0.7250–0.7275 and stop loss at 0.7150. Implementation period: 2–3 days.
Short positions can be opened after the correctional breakdown of the levels of 0.7135 or 0.7100 with the targets around the psychological level of 0.7000. Stop loss is not further than 0.7180. Implementation period: 2–3 days.
Trade
Scenario
Timeframe Intraday
Recommendation BUY STOP
Entry Point 0.7200, 0.7220
Take Profit 0.7250, 0.7275
Stop Loss 0.7150
Key Levels 0.7032, 0.7053, 0.7100, 0.7135, 0.7195, 0.7215, 0.7242
Alternative scenario
Recommendation SELL STOP
Entry Point 0.7130, 0.7090
Take Profit 0.7000
Stop Loss 0.7180
Key Levels 0.7032, 0.7053, 0.7100, 0.7135, 0.7195, 0.7215, 0.7242
Yesterday New Zealand dollar was moderately growing against US one and renewed maximum since October 17. However, the instrument could not consolidate at the new highs. By the end of the trading session, the pair has returned to red zone due to expectations of the further Fed’s interest rate growth in 2018.
In the morning, the pair is trading in the different directions. It has fallen in the opening of the session partially due to the Chinese statistics: December growth of the consumer inflation had not met the traders’ expectations. It grew by 0.3% MoM, while +0.4% MoM was expected, and by 1.8% YoY, while +1.9% YoY was supposed. Still, the fall has been balanced.
The investors are now waiting for new drivers, such as commentaries of Fed's officials, to appear.
Support and resistance
On the daily chart, Bollinger Bands are steadily growing. The price range is narrowing from below, reflecting the flat dynamics appearance in the beginning of the current trading week. It is better to open short positions, focused on the fast correction of the instrument to the area of the middle line of the indicator.
MACD is slightly reversing downward, ready to form a sell signal (the histogram should be below the signal line). It is better to wait until sell signal is confirmed.
Stochastic's dynamics is the same; it is ready to break down the level of 80. Current indicator’s readings reflect that NZD is overbought in the short term.
Resistance levels: 0.7195, 0.7215, 0.7242.
Support levels: 0.7135, 0.7100, 0.7053, 0.7032.
Trading tips
Long positions can be opened after the breakout of the level 0.7195 or 0.7215 with the targets at 0.7250–0.7275 and stop loss at 0.7150. Implementation period: 2–3 days.
Short positions can be opened after the correctional breakdown of the levels of 0.7135 or 0.7100 with the targets around the psychological level of 0.7000. Stop loss is not further than 0.7180. Implementation period: 2–3 days.
Trade
Scenario
Timeframe Intraday
Recommendation BUY STOP
Entry Point 0.7200, 0.7220
Take Profit 0.7250, 0.7275
Stop Loss 0.7150
Key Levels 0.7032, 0.7053, 0.7100, 0.7135, 0.7195, 0.7215, 0.7242
Alternative scenario
Recommendation SELL STOP
Entry Point 0.7130, 0.7090
Take Profit 0.7000
Stop Loss 0.7180
Key Levels 0.7032, 0.7053, 0.7100, 0.7135, 0.7195, 0.7215, 0.7242