Good afternoon team,
Victoria has just announced stage 3 lock downs across the Melbourne area for an additional 6 weeks.
This could put other Governments under pressure across the globe, especially countries that are seeing increased corona-virus cases. Taking a look at the US they have been reporting 40,000 cases per day for the last couple of weeks. The market has been completely ignoring the second wave as the mortality rate has remained relatively low. However, hospitals and the health care system in general is being over run in the US, therefore the mortality rate unfortunately may increase as patients may not be able to receive health care.
USD has remained under pressure due to the decreased demand for safe havens. We are now looking to BUY the USD against a commodity related currency as we see strength pushing back onto the safe haven assets. As we are buying the EURAUD we do not want to short the AUD again, instead we will look to the sister currency NZD.
NZDUSD – Daily Time Frame
The market has reached a key negative trend line on the daily time frame. RSI has also broken an inclining trend line, retested and is now moving lower.
NZDUSD 4 Hour
We are now looking to add a sell on the NZDUSD back towards the trend line support around the 0.6390 level.
Trade Setup: SELL – Market execution, current price 0.6545, stop loss 0.6620, and take profit 0.6390.
Stop loss: 85 pips
Take Profit: 155 pips