Good afternoon Trading Floor
EURUSD missed the TP by 7 pips which is slightly frustrating. The USDCAD is in a possible bear flag so we decided to close out and move onto the NZDUSD due to the extreme peak on the charts. Yesterday, the NZD strengthened across the board as the RBNZ failed to provide the market with the information they were looking for. Market consensus was the RBNZ would provide information on the next interest rate cut, and a move into the negative territory. However, they stood firm and the market took the news as NZD positive. The rally could be seen as an overreaction, and based on the technical levels it appears to have reached a major resistance zone. We are now looking to trade the retracement as the global stock market also appears to be in corrective structures.
NZDUSD – Daily Charts
The 0.6930 zone appears to be a crucial resistance/support area. We also need to be aware of 0.7000 which is a round number, the market can be attracted to those numbers.
NZDUSD – 4 Hour Charts
There is also a key trend line in play with a rising channel formation. We are looking to trade the market back towards the lower end of the channel.
Trade Setup: SELL Market execution, current price 0.6886, stop loss 0.6966 and take profit left open, possible targets around the 0.6792 and 0.6680 levels.
Stop loss: 80 pips
Take profit: 94-206