The New Zealand dollar is trading lower intraday against the US dollar, as the comments from RBNZ officials regarding the intervention have ignited a down-move in the NZD/USD pair. The pair has even breached an important trend line on the 4 hour chart. I think any major rallies should present us a sell opportunity in the short term.
Looking at the hourly chart of NZD/USD, the broken trend line could act as a resistance moving ahead. If the pair makes a short-term correction, as highlighted in the chart below and trades closer to the 0.8700 level, then we can jump into a sell trade. Remember, if the pair moves lower from the current levels, then we will not consider selling, and might look to buy dips depending on the price action at that time.
Initial target should be around the daily 20 moving average, and final target could be around the 0.8560 level. Stop should be placed above the 0.8740 level.
Reviewing yesterday’s events and trades
Yesterday, there was no major market moving event scheduled. The Fed’s Yellen speech also turned out to be a non-event. The main thing to note from her speech is that the central bank thinks that the labor market recovery is far from satisfactory. The EUR/USD and GBP/USD remained stuck in a range with a slight downward momentum. Earlier during the Asian session, the Australian employment report and Chinese trade numbers were released, which came better than expected and lifted the AUD/USD pair above 0.9360.
Fundamental Outlook for the day
Today, there are two important events scheduled during the day – the European central bank and Bank of England will announce the key interest rates. Moreover, as always there will be an ECB’s press conference. Both the central banks are expected to keep the interest rates unchanged, but the main mover could be the press conference. So, keep an eye on these events, as it could ignite some swing moves later during the day.