NZD/USD: New Zealand dollar declines
21 January 2019, 09:14
| Scenario | |
|---|---|
| Timeframe | Intraday |
| Recommendation | BUY STOP |
| Entry Point | 0.6735 |
| Take Profit | 0.6770, 0.6789, 0.6800 |
| Stop Loss | 0.6704 |
| Key Levels | 0.6589, 0.6621, 0.6662, 0.6704, 0.6730, 0.6754, 0.6770, 0.6789 |
| Alternative scenario | |
|---|---|
| Recommendation | SELL STOP |
| Entry Point | 0.6700 |
| Take Profit | 0.6662, 0.6630, 0.6621 |
| Stop Loss | 0.6730, 0.6735 |
| Key Levels | 0.6589, 0.6621, 0.6662, 0.6704, 0.6730, 0.6754, 0.6770, 0.6789 |
Current trend
NZD trades down paired with USD, updating local lows of January 8.
Investors are again focused on the US-Chinese trade negotiations. US Treasury Secretary Steven Mnuchin suggested that some of the additional tariffs on Chinese goods should be lifted to achieve a breakthrough in the negotiations. This decision is opposed by the trade representative Robert Lighthizer, who believes that China can regard this step as a manifestation of weakness.
The head of the Chicago Fed, Charles Evans, said there's a possibility of a pause in raising interest rates because of a recession in the economies of the EU and the PRC, as well as the consequences of a trade war and the government shutdown in the US. Thus, since the beginning of the year, the sentiment of the American regulator has changed significantly, and now the market may not see two rate increases planned for 2019.
Support and resistance
Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is actively narrowing, reacting to the emergence of descending correction in the short term. MACD is going down keeping a fairly stable sell signal (located below the signal line). Stochastic keeps a steady downward direction, but is rapidly approaching its minimum levels, which indicates the risks associated with the oversold NZD.
Existing short positions should be kept until the situation clears up.
Resistance levels: 0.6730, 0.6754, 0.6770, 0.6789.
Support levels: 0.6704, 0.6662, 0.6621, 0.6589.
Trading tips
To open long positions, one can rely on the rebound from 0.6704 as from support with the subsequent breakout of 0.6730. Take profit — 0.6770 or 0.6789, 0.6800. Stop loss — 0.6704.
A breakdown of 0.6704 may be a signal to further sales with targets at 0.6662 or 0.6630, 0.6621. Stop loss — 0.6730 or 0.6735.
Implementation period: 2-3 days.
NZD trades down paired with USD, updating local lows of January 8.
Investors are again focused on the US-Chinese trade negotiations. US Treasury Secretary Steven Mnuchin suggested that some of the additional tariffs on Chinese goods should be lifted to achieve a breakthrough in the negotiations. This decision is opposed by the trade representative Robert Lighthizer, who believes that China can regard this step as a manifestation of weakness.
The head of the Chicago Fed, Charles Evans, said there's a possibility of a pause in raising interest rates because of a recession in the economies of the EU and the PRC, as well as the consequences of a trade war and the government shutdown in the US. Thus, since the beginning of the year, the sentiment of the American regulator has changed significantly, and now the market may not see two rate increases planned for 2019.
Support and resistance
Bollinger Bands in D1 chart demonstrate flat dynamics. The price range is actively narrowing, reacting to the emergence of descending correction in the short term. MACD is going down keeping a fairly stable sell signal (located below the signal line). Stochastic keeps a steady downward direction, but is rapidly approaching its minimum levels, which indicates the risks associated with the oversold NZD.
Existing short positions should be kept until the situation clears up.
Resistance levels: 0.6730, 0.6754, 0.6770, 0.6789.
Support levels: 0.6704, 0.6662, 0.6621, 0.6589.
Trading tips
To open long positions, one can rely on the rebound from 0.6704 as from support with the subsequent breakout of 0.6730. Take profit — 0.6770 or 0.6789, 0.6800. Stop loss — 0.6704.
A breakdown of 0.6704 may be a signal to further sales with targets at 0.6662 or 0.6630, 0.6621. Stop loss — 0.6730 or 0.6735.
Implementation period: 2-3 days.
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