NZDUSD Continues Above Ichimoku
Even though New Zealand’s GDP came in lower than expected on Thursday’s Sydney session, NZDUSD continues above Ichimoku on the daily chart. A busy economic calendar continues on Thursday and we have a ton to talk about. So read on here and don’t forget to join me for a FREE webinar at 5 PM GMT as I go over smart strategies to trade the British Pound now that the Brexit fuss is over.
NZDUSD Continues Above Ichimoku – Technical Analysis
NZD/USD pair has been moving in an upward channel above the Ichimoku cloud since February 2016, and the range appears strong enough to continue towards resistance at 50 and 61 percent Fibonacci levels at 0.7530 and 0.7830 respectively.
To explain the relationship between the technicals and fundamentals, we already know that the RBNZ is confident in New Zealand’s growth. That is why this lower than expected GDP reading could lag its impact towards the London session, however it could be short-lived, especially since the number was still higher than previous quarter by 0.2%
Our pivot levels are set at 0.7223 and the lower band of the Ichimoku cloud as it proceeds. Medium to long term support levels are set at 0.6850 and 0.6470 in extension.
NZDUSD Continues Above Ichimoku – Trading Strategy
Range trading could be suitable for medium-term traders with lower risk tolerance. Since the pair is already back to the pivot level, there is a 50/50 risk-reward for either bearish or bullish scenario.
We could see further drops in the pair towards the pivot of 0.7223, however as long as NZDUSD continues above Ichimoku, our bearish support will remain Ichimoku’s upper band.
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A break below the Ichimoku cloud and the upward channel could change our medium to long-term outlook into bearish.
If the pair is supported by the 0.7223 pivot level or the upper band of the Ichimoku cloud, a medium-term bullish signal will trigger targeting the upper band of the channel or the 50% Fibonacci level at 0.7530.
We have more high risk events on Thursday as it continued with Australia’s jobs report during the Sydney session. During the London session we will first get Switzerland’s Monetary policy assessment from SNB at 7:30 AM GMT followed by UK Retail Sales at 8:30 AM. After printing spectacular 1.4% gain in July, U.K. retail sales are expected to be 0.4% lower in August.
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Volatility should continue as Euro-Zone Consumer Price Index is released at 9 AM and then at 11 AM as Bank of England releases Rate its Decision. They are expected to keep rates unchanged at 0.25% and any change could create massive volatility in GBP crosses. We have more important data coming out during the New York session as the US releases their Retail Sales for August at 12:30 PM GMT, along with their Initial Jobless Claims and PPI.
As the New York session begins there will be a number of data released right at 12:30 PM GMT including Canada’s International Securities Transactions, and US Consumer Price Index, also known as the CPI. Analysts are expecting for the CPI to have increased by 0.1% on a monthly basis. Next from the US is UoM Consumer Sentiment released at 2 PM GMT to end the trading day, and the trading week.
Here are Invest Diva’s calculations for important AUD/USD approximate levels to keep an eye on:
|Support Levels||Turning Point||Resistance Levels|