Can the Kiwi sustain its reversal against the dollar?
I’ve got my eye on this simple uptrend pullback setup on the hourly chart of NZD/USD!
Before moving on, ICYMI, yesterday’s watchlist checked out retracement levels on GBP/USD just before the BOE statement. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
BOE hiked rates by 0.25% to 1.25% as expected
Canadian wholesale sales sank 0.5% vs. projected 0.1% uptick
Philly Fed index tumbled from +2.6 to -3.3 vs. estimated +5.1 reading
U.S. building permits fell from 1.82M to 1.77M vs. 1.78M forecast
U.S. housing starts slowed from 1.81M to 1.55M vs. 1.70M forecast
BOJ kept interest rates on hold at -0.10% as expected
BOJ maintained policy settings for yield curve control and asset purchases
BOJ added reference to FX moves as part of its list of risks
Fed Chairperson Powell’s speech at 12:45 pm GMT
U.S. industrial production and capacity utilization at 1:15 pm GMT
U.S. CB leading index at 2:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: NZD/USD
Missed the neckline breakout on this one?
Don’t worry, you might still be able to catch a quick retest!
NZD/USD is pulling back to the broken neckline of its inverted head and shoulders pattern at the .6300 major psychological mark.
This happens to be right smack in line with the 61.8% Fibonacci retracement level, which could attract more Kiwi bulls. If so, the pair could make its way back up to the swing high near .6400 next.
Stochastic is still heading south to show that sellers have the upper hand, but the oscillator is approaching the oversold region soon.
However, the 100 SMA is below the 200 SMA to signal that there’s a chance the selloff might resume. Better watch out for a break below the Fibs to gauge if the downtrend could stay intact.
Also note that the odds could favor the safe-haven dollar if risk-off flows persist. After all, the Fed just hiked rates by 0.75% this week, which might also dampen demand for higher-yielding assets.
Don’t forget to watch out for Fed head Powell’s speech later today if you’re trading this one!