Chart of the Day NZDUSD
NZDUSD Basing Pattern with clear invalidation levels
Though expectations have been built up for more easing from the RBNZ in response to the coronavirus, these expectations have been offset by the latest emergency Fed response, in the form of a 50bp cut. Meanwhile, NZ PM Ardern said that the global impact from Covid-19 is “likely to be significant” but not necessarily long-term, and that she hasn’t received any advice that the NZ economy faces a recession. This in conjunction with a recovery in global sentiment, have helped to prop Kiwi off recent lows.
US equities rallied on Wednesday as major victories from former US Vice President Joe Biden during Super Tuesday sparked a massive rally within the health-care sector. With Wednesday’s rally, all three major averages moved out of correction territory. The US 10-year Treasury yield briefly fell below 1% again on Wednesday only to double back and trade higher after the US federal government announced an $8bn spending package to help fight the spread of COVID-19. The US dollar recouped some losses on Wednesday as market participants looked to see which other major central banks might follow the US Fed and make emergency cuts to their interest rates.
From a technical & trading perspective the NZDUSD has tested and initially defended the monthly trendline support highlighted earlier in the week, bulls are now being presented with a low risk entry opportunity to initiate long exposure. Using the intraday charts we can clearly see the potential for a bullish inverse head and shoulders pattern to develop. At a minimum bulls can expect a test of the equidistant swing objective sited at .6399 while .6265 remains in tact as ‘C’ point support, prices are currently correcting but as this level holds, long exposure could be increased through today highs confirming the inverse head and shoulders pattern, looking initially for the ‘D’ target at .6399 and then on to a test of the major descending trendline resistance towards .6400
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Roz has been engaged in the financial markets since 2017, specializing in Foreign Exchange, Before joining to FOREX IN WORLD she start to learn forex trading related information.
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