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NZD/USD Advance Eyes Key Hurdle at 7300 Ahead of Labor Report

NZD/USD Advance Eyes Key Hurdle at 7300 Ahead of Labor Report

2016-08-16 17:10:00
Michael Boutros, Strategist
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Talking Points

  • NZD/USD advance at risk ahead of New Zealand Labor Report
  • Updated targets & invalidation levels

NZDUSD 120min

NZD/USD Advance Eyes Key Hurdle at 7300 Ahead of Labor Report

Chart Created Using TradingView

Technical Outlook: Kiwi is trading just below a key resistance zone at 7292/96 – this region is defined by the July high-day close & the March 2015 low-day close and has offered up some strong infections in the exchange rate since last year. We’ve been tracking this resistance range for the past few weeks on SB Trade Desk and heading into tonight’s New Zealand labor report the long-bias is at risk below this region.

Although it’s too soon to rely on this newly identified pitchfork off the highs, it further highlights this resistance zone. Interim support rests at 7227 backed by the monthly open at 7200 & 7180/83. A break below this level would suggest a deeper correction is underway with such a scenario targeting 7130 & 7099.

A breach above 7300 keeps the long-bias in play targeting resistance objectives at the July high, 7325 & 7379-92. From a trading standpoint I would be looking for an exhaustion-high to fade. For the complete setup and to continue tracking this trade& 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.

NZD/USD Advance Eyes Key Hurdle at 7300 Ahead of Labor Report
  • A summary of the DailyFX Speculative Sentiment Index (SSI)shows traders are net short NZDUSD- the ratio stands at -1.70(37% of traders are long)-bullishreading
  • Yesterday the ratio was -1.72. Short positions are 12.6% lower than yesterday and 20.9% above levels seen last week.
  • Open interest is 12.1% lower than yesterday and 2.3% below its monthly average.
  • The recent softening in short-interest leaves the near-term advance vulnerable heading into tonight’s jobs data. That said, keep in mind the latest extreme read in SSI was -2.58 back at the July peak- that was the most extreme reading since July of 2014 (SSI was at -6.18 & marked the all-time high in price).

Help fine-tune you entries, click here to learn more about the DailyFX Grid Sight Index (GSI)

Relevant Data Releases This Week

NZD/USD Advance Eyes Key Hurdle at 7300 Ahead of Labor Report

Other Setups in Play:

Looking for more trade ideas? Review DailyFX’s Top Trading Opportunity of 2016

---Written by Michael Boutros, Currency Strategist with DailyFX

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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