2016-08-19 12:04:59

Technical performance

Prev. closure: 0.7292; Daily range: 0.7243-0.7295;
Opening: 0.7292; 52-week range: 0.6233-0.7348;
Annual profit: +10.16%; Previous day's change (%): +0.58.

Analytical review:

  • In the past week the following support and resistance levels formed for the pair NZD/USD: 0.7210 and 0.7300. During yesterday's trading session the currency was holding firmly to a resistance at 0.7300 and the kiwi therefore stopped rallying.
  • Important stats on New Zealand's economy have been released this week. According to NZ Bureau of statistics, the employment rate grew to 2.4% in the second quarter against a previous value of 1.4%.
  • Philadelphia's FED reported yesterday that the production activity index had increased to 2.0 in August against July's value of -2.9, which corresponded to market expectations.
  • The Commitments of Traders Report provides ambiguous data. Huge operators increased long positions by 1265 contracts. Short positions were increased by 2095 contracts.
  • Technical analysis suggests eventual correction for NZD/USD. The MACD histogram is located in the negative zone and continues declining on the H1 chart. A classical reversal pattern of the "Price/Action" method - Pin Bar - has formed near a resistance level of 0.7300.

Summary:

  • Upbeat data on the US and NZ economies have resulted in increased volatility and pressure on NZD/USD. According to COT report, huge operators are not definite about the kiwi.
  • Thus, there is no unidirectional movement in the market. We recommend searching for market entry points from key support and resistance levels.

Trading tips for NZD/USD

Key levels:
Support levels: 0.7245, 0.7210, 0.7150
Resistance levels: 0.7265, 0.7300

Medium-term trading, H1
The currency is currently trading near a local resistance level at 0.7265. Once this level steadies and relevant confirming signals appear (Price Action patterns, for example), we recommend searching for market entry points to open short positions. Risk per trade: no more than 2% of equity. Stop order shall be placed a bit above the signal line. We recommend that prospective profits should be fixed partly at the levels of 0.7220, 0.7170 and 0.7120, with Trailing Stop applied.

Medium-term trading, H1
Medium-term trading, H1

Short-term trading, M15
The currency is trading at 0.7245-0.7275. We advise you to search for market entry points once this zone is broken and tested. Positions shall be opened in the direction of the signal line and the nearest support/resistance level. Risk per trade: no more than 3% of equity. Stop order shall be placed a bit above/below the signal line. Prospective profits shall be fixed partly, at 50%, 30%, and 20% of a prospective fluctuation, with Trailing Stop applied.

Short-term trading, M15
Short-term trading, M15