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NZD/USD: Vulnerable Ahead of RBNZ – Range Break in Focus

NZD/USD: Vulnerable Ahead of RBNZ – Range Break in Focus

Michael Boutros, Strategist

Talking Points

  • NZDUSD holds focus range heading into RBNZ tomorrow
  • Updated targets & invalidation levels
  • Join Michael for Live Weekly Strategy Webinars on Mondays at 12:30GMT

NZDUSD 240min

NZD/USD 240min Chart

Technical Outlook: NZDUSD has continued to hold above a key support threshold we’ve been tracking at 6861/85- this region is defined by the December / January lows & the 50% retracement of the late-2015 advance. The focus heading into the RBNZ interest rate decision tomorrow night is on a break of the 6860-6970 range with a break below the 2016 open at 6828 needed to validate resumption of the broader downtrend.

A breach above 6970 suggests a larger scale recovery is underway with such a scenario targeting 6994 backed by the upper parallel / 7044- an area of interest for possible exhaustion / short-entries. A third of the daily average true range (ATR) yields profit targets of 19-22pips per scalp. Added caution is warranted heading into the RBNZ with the release likely to fuel increased volatility in the Kiwi crosses.

Check out our NZDUSD 2Q projections in our Free DailyFX Trading Forecasts.

NZD/USD: Vulnerable Ahead of RBNZ – Range Break in Focus
  • A summary of IG Client Sentiment shows traders are net-long NZDUSD- the ratio stands at +1.03 (50.7% of traders are long)- neutral reading
  • Retail traders have been net-short since March 27- Kiwi is down 2% since
  • Long positions are 4.7% lower than yesterday and 16.6% lower from last week
  • Short positions are 27.9% higher than yesterday but 20.6% higher from last week
  • While broader sentiment continues to offer little conviction on an immediate bias, the recent surge in short-positioning as price comes into support suggests the immediate downside outlook is at risk heading into the RBNZ

See how shifts in Kiwi retail positioning are effecting market trend- Click here to learn more about IG Client Sentiment indicators!

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Relevant Data Releases

NZD/USD: Vulnerable Ahead of RBNZ – Range Break in Focus

Other Setups in Play:

- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list.

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

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