THE NEW ZEALAND DOLLAR: WHAT EVERY FOREX TRADER NEEDS TO KNOW
Fundamental Point of View on NZD/USD:
This week, we have no major fundamental news specifically for the New Zealand Dollar. Therefore, we will focus on looking at the news in the US which will have a vital part to play in the foreign exchange market and the movements of the currency pair.
New Home Sales in the United States: Wednesday, 14:00.
The sales of new homes trigger a lot of wider economic activity, such as the amount of spending on infrastructure, and therefore it is correlated with the wider economy in the country. After achieving an annualised level of 694K sales in March, a small slowdown to 680K is expected to be on the cards for April.
The FOMC Meeting Minutes: Wednesday, 14:30.
The FOMC is a key event in the foreign exchange market and here’s why beginners to professional traders should all be looking at the event: The FOMC Meeting Minutes are a detailed record of the FOMC’s most recent meeting, providing in-depth insights into both the economic and financial conditions that influenced their vote on where to set interest rates.
The Federal Reserve publishes minutes from its meeting in early May when it decided to leave the interest rate unchanged and made some subtle changes to the statement, such as describing the inflation target as symmetric, a wording that triggered speculation that the Fed will tolerate higher rises in prices after a long period of low inflation. Markets will also want to hear a message that the hike in June is on track. It is priced in.
Technical Point of View on the NZD/USD
From the daily chart, we can see the inverse head and shoulders pattern that previously formed. We have been in a steep bearish trend on this pair for the last month or so. We are now looking for a distinct reversal change. The bottom for our prediction should be the 0.6850 level, it is showing major demand with a great probability of moving higher from there.
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Our NZD/USD Forex Trading Strategy
Trade Entry: Long NZD/USD @ 0.6850 with a 40 pip stop loss and a target of 0.7080
Key Technical Levels on the NZD/USD
- 0.6930 – Short-term Selling Level
- 0.6970 – Short-term Selling Level
- 0.7040 – Short-term Selling Level
- 0.7090 – Long-term Selling Level
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Hopefully, you have enjoyed today’s article. Thanks for reading! Have a fantastic day!
Nisha Patel
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