NZD/USD:- What Impact Will The Fundamentals Have This Week?
Analysing this pair on the higher time frames and reviewing recent weeks, we can see this pair, like many of the USD crosses, has had little movement and has not traded outside of a 150 PIP range between the monthly key level of support at 0.6700 and the daily resistance of 0.6850.
Dropping down to the daily time frame, this daily resistance of 0.6850 needs to be respected. As we can see on my chart, we have rejected this level strongly three times when price approached and tried to break higher, only to have bears come into the market and drive price back down.
Choppy price action over the past week has shown us mixed signals, such as a bearish engulfing rejection from the daily resistance of 0.6850, only to be followed by a pin bar the following day to push price higher. Though price is seemingly hard to read, we can see on lower times frames like the four-hour chart, that we are creating higher highs and higher lows, showing us there is a short-term uptrend in place. Whether this uptrend can continue will be decided by the fundamental news today and on Friday.
This week there is a lot of fundamentals with this pair related to the USD. This evening we have the FOMC meeting at 19.00 GMT and on Friday we have the Non-Farm Payroll numbers the biggest news and data released from the US each month.
Amongst all the news and the choppy price action, the technicals paint an easy picture to read, it just takes patience to wait for the signal to take the correct trade. On my 4 hour chart I have marked out my short term ascending trend line and the 0.6840-50 resistance region. This is forming a triangle formation which in the next few days, we could continue to see price bounce around within until we have a break. Once we break either above the triangle and breaking the 0.6850 resistance which has been holding firm, or we break below the trend line, this will provide us with our buy or sell signal. As there is a lot of fundamentals, extra care needs to taken when trading this week. What we may see is price breaking out of the triangle on smaller time frames only to reverse sharply soon after, so as always I will be waiting for a very strong 1- 2-hour candle close before entering.