- Chinese economy growing at its slowest pace in 5yrs, coming in at 7.3%. Industrial production was above expectations at 9%.
- RBA released the monetary policy minutes but was a non-event price wise. Read the breakdown here
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TECHNICAL ANALYSIS:
NZDUSD
Today was one of those days I was struggling to find anything of particular interest, mainly because many of the currency pairs are either stuck within horrid ranges, or have no pending catalysts.
Therefore I am now referring to D1 as this is something to keep in your watchlist.
Due to my analysis of the USD Index I suspect we will continue to see choppy range trading this week. However NZD/USD is now drifting towards the upper part of the 77-80c range, with bearish divergence and a Hanging Man on higher volume. This does suggest we may have an interim top approaching 80.50, the Jan low, and potential for a Bearish Wedge.
We do not have data from NZ until Thursday and Friday which includes Trade Balance and CPI. Any soft data here should see NZD/USD back within range. However before this we also have US inflation data which is strong could see the topping sooner or later.
A break above 80.50 invalidates the analysis so we can place a stop above here as we await the catalysts. This then leaves the decision of how to enter. Picking tops can be tricky as there is always room for one more high, so I would prefer to set a sell limit below 80.50 with a stop well inside this key level, which could achieve a minimum of a 2:1 reward/risk ratio.
Target 1: 0.786
Target 2: 0.77