The NZD/USD has started to settle into a tight range following its latest rally and new yearly high creating an opportunity for scalpers. The Kiwi continues to find support on global risk appetite and rising interest rate expectations. However, concerns over growth have started to emerge which has dampened demand for risky assets leaving the pair directionless.
Key Technical Levels
The current rally has established a clear trend line for the NZD/USD which traders can target for entering and exiting positions. The psychological level of 0.7500 and the yearly high of 0.7634 are also potential support and resistance levels that traders can monitor. The pair has started to settle into a 100 pip range between 0.7500and 0.7600 making it ideal for scalping strategies.
Quantitative Metrics
A rising ATR and a wide Bollinger band are red flags for scalpers but we have started to see the daily range narrow. At 118 pips the NZD/USD’s ATR is one of the lowest of the pair’s listed below but its percentage of spot is the highest at 1.55%. An implied volatility of 16.11 is another detracting factor and a sign that a break out may be forthcoming.
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To discuss this report or be added to the email list, contact John Rivera, Currency Analyst: jrivera@fxcm.com
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