Talking Points
- NZD/USD eyeing support / near-term focus higher above 6640
- Updated targets & invalidation levels
- Event Risk on Tap This Week
NZDUSD Daily
Chart Created Using FXCM Marketscope 2.0
Technical Outlook
- NZDUSD support confluence at 6644/50- broader bullish invalidation
- Resistance 6729 (weekly open) backed by 6790- near-term bearish invalidation
- Subsequent resistance objectives at 6849, the October high at 6896 & 6970
- Support break targets 6619, 6565 & the lower median-line parallel
- Daily RSI coming into September support trigger- break would be bearish
- Key Event Risk Ahead: New Zealand Unemployment tonight, U.S. ADP employment tomorrow & NFPs on Friday
NZDUSD 30min
Notes: There’s power in parallels – Kiwi has continued to trade within the confines of these parallels off the October highs with today’s lows coming in just pips off the 38.2% retracement of the late-September advance at 6644. The short-side is at risk while above this region heading into major event risk into the later part of the week.
Interim resistance targets eye at the October low-day close at 6699 backed by the weekly open at 6729 and the 50% retracement at 6758. A breach above 6790 is needed to validate a larger turn in the kiwi, targeting the high-day close at 6849 & the October high. A quarter of the daily average true range yields profit targets of 24-27 pips per scalp.
Caution is warranted heading into tonight’s New Zealand employment report with the release likely to fuel added volatility in kiwi crosses. Although the headline unemployment figure is expected to uptick to 6.0%, labor force participation is expected to hold near record highs at 69.3% (is the all-time high hit back in march was 69.5%). Keep in mind that an increase in the broader participation rate will tend to put artificial upside pressure on the headline print and as such, risk remains to the upside for the kiwi on a stronger read.
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Relevant Data Releases Next Week
Other Setups in Play:
- Webinar: Big Data Week to Threaten USD- RBA, BoE, NFP Setups in Focus
- AUD/JPY Shorts Primed for BoJ, RBA
- EUR/JPY in Free Fall Ahead of BoJ- Bearish Sub 134
- GBPJPY Shorts Favored Ahead of Major Event Risk
- USDCAD Risks Reversal Below 1.3150 on Canadian CPI
---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list
Join Michael for Live Scalping Webinars on Mondays on DailyFX and Tuesday, Wednesday & Thursday’s on SB Trade Desk at 12:30 GMT (8:30ET)
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