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NZDUSD into the RBNZ meeting on Thursday

Market Analysis

NZDUSD,  H1 and Daily

NZDUSD has been trading heavily into the RBNZ meeting on Thursday amid expectations for the central bank to lay down some relatively dovish guidance given low inflation and concerns about the Kiwi’s strength. This is expected to accompany an unchanged policy announcement, which would leave the official cash rate at 1.75%. NZDUSD logged a 28-month high on July 26 at 0.7558 before ebbing to an 18-day low yesterday at 0.7347. In higher timeframes a downside for this pair is expected ,assuming RBNZ will deliver a package of dovish guidance, while technically-wise the same bearish picture is seen especially after pair broke the 20 DMA yesterday and it is traded below that today. However intra-daily, the pair presents opposite move than Daily time frame.

Hence two positions have been taken, i.e. one in the hourly chart and on the Daily chart.

In the Daily chart, A SHORT position was taken based on the break yesterday below 20-DMA and the 2 consecutive bearish candles, that drifted pair at 0.7340 low. Also the pair seems that has prepared nearly a rounding top. Hence an entry was taken at 0.7365 with  Daily target at 50 DMA, i.e. 0.7305, which is also the confluence of ATR(14) indicator . Based on ATR support was set at 0.7430.  Meanwhile Parabolic SAR is negative while RSI is at 35 looking for further weakness towards oversold territory.

In the Hourly chart, a Long Position was taken on the anticipation of the US data later on, since pair moves above 20 period MA for 3 consecutive sessions,  while the last hour a Yo Sen candle has been formed which consider be a Bullish pattern. The NZDUSD moves above 0.7340 ( also 200- period EMA in 4-hour chart)since yesterday. Hence this can be consider as an intra-day support level.  In the hourly chart the parabolic SAR have turned positive since yesterday , while the short-term RSI is at 65. Hence an entry was taken at 0.7365 with  hourly targets at 50 period MA, i.e. 0.7380,  and at round number 0.7400. Support was set at 0.7330.

 

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Andria Pichidi

Market Analyst

HotForex

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