Technical Bias: Bearish
Key Takeaways:
- NZDUSD looks vulnerable as bearish pin bar emerges on hourly chart
- FOMC minutes are due today
- 0.7621 remains key hurdle in short term
The New Zealand Dollar (NZD) extended upside movement against the US Dollar (USD) on Wednesday, increasing the price of NZDUSD to more than 0.76000 ahead of the Federal Open Market Committee (FOMC) minutes which are due to release today during the US evening session.
Technical Analysis
As of this writing, the pair is being traded near 0.7591. A support can be seen around 0.7500, the psychological number ahead of 0.7485, the low of the last major downside move on four-hour timeframe.
On the upside, the pair is likely to face a hurdle near 0.7600, the psychological number ahead of 0.7621, the trendline resistance and then 0.7696, the high of the last major upside rally. The technical bias in short term remains bearish due to a lower low on the four-hour timeframe.
FOMC Minutes
The Federal Reserve is due to release minutes from the last Federal Open Market Committee (FOMC) meeting which was held last month. Investors will be eyeing the FOMC minutes very closely in order to gauge the future monetary policy outlook of the world’s largest economy. Any hawkish statement about earlier than expected interest rate hike could incite huge bearish pressure in the price of NZDUSD and vice versa.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around the current levels appears to be a good strategy in short to medium term. The trade should however be stopped out on a daily closing above the 0.7650 resistance area.
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