Post-Brexit NZDUSD Support Vulnerable to Weak NZ Trade Balance
- NZD/USD targets near-term resistance ahead of CPI / Retail Sales
- Updated targets & invalidation levels
Chart Created Using TradingView
Technical Outlook: Kiwi is sitting just above the post-Brexit lows after rebounding off confluence support last week at 6970. The pair continues to trade within the confines of a descending median-line formation extending off the monthly highs. The immediate short-bias is at risk while above this level heading into tonight’s New Zealand Trade Balance figures. Consensus estimates are calling for a narrowing trade balance surplus from 358m to just 150m and with a contraction expected, the risk is for a stronger number to offer a near-term reprieve to the recent selling pressure.
That said, look for near-term resistance at 7013 backed by a confluence region into the median-line at 7069- an area off interest for possible exhaustion / short-entries. A breach above 7182 would be needed to shift the broader focus. From a trading standpoint, I would be looking to sell strength while below the median-line with a break lower targeting subsequent support objectives at the lower parallel, 6894 & the 2016 open at 6828. For the complete setup and to continue tracking this trade and more throughout the week- Subscribe to SB Trade Deskand take advantage of the DailyFX New Subscriber Discount.
Avoid the pitfalls of near-term trading strategies by steering clear of classic mistakes. Review these principles in the "Traits of SuccessfulTraders” series.
- A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders are net long NZDUSD- the ratio stands at +1.09(52% of traders are long)-weak bearishreading
- Yesterday the ratio was +1.10. Long positions are 4.2% higher than yesterday and 32.2% above levels seen last week.
- Open interest is 4.8% higher than yesterday and 8.4% above its monthly average.
- SSI flipped to net positive on July 22nd and although the broader outlook remains weighted to the short-side, the pair is coming into interim support & a weak SSI reading suggests the risk remains for a near-term recovery before turning lower.
Help fine-tune you entries, click here to learn more about the DailyFX Grid Sight Index (GSI)
Relevant Data Releases This Week
Other Setups in Play:
- Webinar: USDOLLAR within Striking Distance of 2016 Open Ahead of FOMC
- USD/CAD Eyes Key Resistance Hurdle Ahead of Canada Retail Sales/CPI
- AUD/JPY- View Weakness as an Opportunity
- EUR/USD Battle Lines Drawn Ahead of ECB- Levels To Know
- GBP/JPY at Brexit Levels- Elevated Risk for Declines on UK Employment
Looking for more trade ideas? Review DailyFX’s Top Trading Opportunity of 2016
---Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michaelon Twitter @MBForex contact him at firstname.lastname@example.org 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)
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.