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Forex Market Analysis: NZD and USD at Support Area. US GDP Data Release in Focus

Forex
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Friday, April 28, 2017/ 11:00 AM /Meristem


Source: MERI FX


Fundamental Indication

NZD:
The New Zealand Dollar has been under pressure against the US Dollar because of concerns over Trump’s trade barriers. A strong hypothesis for the pair’s sell-off may be as a result of President Trump criticizing Canada’s tariffs on imports of U.S. milk products. Traders may be worried that Trump’s next move may be against the dairy industry which could have an effect on the New Zealand economy.

USD:
Mixed sentiment still persist as US-North Korea tension rise, the government shutdown which may take effect on Donald Trump’s symbolic 100th day in office, The tariff on Canada’s softwood import and the North American Free Trade Agreement (NAFTA) trade deal reassurance by President Trump.

Technical Analysis

The pair has broken below the 10 month triangle and has approached the 0.6877-0.6862 support area. The break below with strong momentum towards the support area provides two scenarios

Scenario 1:

  •       If the pair pulls back to the triangle with a bearish candlestick confirmation, we advise a “SELL”.  
  •      Stop loss at the high of the bearish candlestick
  •    Price target at 0.6689

Scenario 2:

·         If the pair closes with a bullish candlestick confirmation at the support area, we advise a “BUY”.

·         Stop loss at the low of the bullish candlestick.

·         First price target: 0.7043

·         Second Price target 0.7233.

NB: The Gross Domestic Product (Annualized) (1Q A) today may influence price movement. 

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