NZD/USD Post-FOMC Breakdown: Initial Support Targets in View
- NZD/USD downside risk remains sub-7186, key support 6950
- Updated targets & invalidation levels
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Technical Outlook: Kiwi posted an outside-day reversal bar off confluence resistance yesterday with the subsequent break below the weekly & monthly opening-range lows keeping the focus lower in the pair. A critical support confluence is eyed at 6952/70- a level defined by the June swing low, the July low, the 100% extension of the decline off the yearly high and the lower median-line parallel. Initial resistance stands with the monthly open at 7082 with our broader bearish invalidation at the upper parallel ~7185.
Notes: Note that Kiwi turned precisely off confluence Fibonacci resistance this week at 7242/38 with the decline now taking out targets into 7035. From a trading standpoint I’ll be looking to fade strength sub-7186 targeting the 6952/70 support zone. A break below this key region targets subsequent support objectives at 6897 & the 2016 open at 6828.
A quarter of the daily average true range (ATR) yields profit targets of 18-22 pips per scalp. Economic data out of New Zealand is light into the close of the week but keep an eye out for U.S. housing starts and building permits tomorrow morning.
Relevant Data Releases
Other Setups in Play:
- EUR/USD FOMC Game Plan- Outlook Constructive Within this Formation
- GBP/JPY: 8-Week Rally Faces Key Hurdle Ahead of U.K. CPI, BoE
- Webinar: FOMC Preview- USD Majors in the Crosshairs Ahead of Yellen
- GBP/USD Weakness to Be Viewed as Opportunity
Looking for more trade ideas? Review DailyFX’s 2016 4Q Projections
---Written by Michael Boutros, Currency Strategist with DailyFX
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