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Selling opportunities NZD/USD – Forex Trading Tips
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Originally updated: 08:00
Trading Bias: long USD, short NZD
Currency pair: sell NZDUSD
In today’s trading session we will be focusing on selling opportunities on NZD/USD pair
Current Sentiment:
The FOMC statement last night blamed the economic slowdown on transitory factors and showed expectations for stronger growth and a rate hike this year remain relatively unchanged. This saw USD strengthen off the lows that were made from the poor GDP and speculation that the Fed would be more dovish. Analysts say a hike in June is no longer a probable option.
RBNZ kept rates on hold but were dovish in their statement as they indicated the possibility of a rate cut should inflation drop and demand weaken. Kiwi dropped 100 pips on the move and is looking heavy. The safest entry would be on a pullback to around 0.7670, however it will likely continue to fall from current market price.
Fundamentals:
We still have not had any good data from the US, but the Fed seems to be optimistic. This may set the tone for the rest of the week, as USD is oversold at present levels. We may see a retrace of some of this USD weakness throughout the session but keep an eye for a string of tier 2 US data which may influence price action.
The RBNZ have indicated their bias is towards a cut rather than a hike. Compare this to US where they are planning to hike; we have divergence in monetary policy which will likely put downward pressure on NZDUSD.
The Bank of Japan provided no surprises as they left their QE program unchanged
Technicals:
NZDUSD: There is a strong support trendline together with the 0.76 handle which if breaks will likely see further downside. There is a decent short opportunity on this pair.
Other Market Moving News:
We have a string of tier 2 US and EU data to keep an eye on to increase or decrease evidence for any long USD positions.
Poloz is due to speak during the North American session where he may mention monetary policy.
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