Transcript of Video
Hello everyone, this is today’s video analysis for January 23, 2019. Today we’re going to take a look at the New Zealand Dollar versus the US Dollar [NZDUSD] for today’s trade analysis.
Starting here on the daily timeframe, we could see it’s kind of hard to determine trend here for this currency pair right now. In the past several weeks, we’ve seen falling and rising. Both sides of the market being in control for a period of time and no significant uptrend or downtrend.
If we zoom out a little bit, you could see on the left-hand side, under the blue trend line, clearly a downtrend. There’s no question. Selling within that downtrend would’ve been the best idea. It was wide underneath the 100-period moving average and was clearly a downtrend. In the most recent time though, it hasn’t really been doing that. We don’t see a stiff angle to go up. A stiff angle to go down. We’re just above a fairly flat 100-period moving average. So, there’s no real good indication of direction here for the NZDUSD.
So, we have to look more as an intraday opportunity than a long-term trending action here for this currency pair. So, let’s go ahead and zoom it in. So, as we could see, again, like I said, we’ve seen downward movement here, where it came down. Even that flash crash pressuring down into 0.6550. Then it turned right back around. And just when you think it’s going to go start moving back up, it turns back around and goes back down.
Now finding support around the 0.6710, 0.6735-level, the pink-shaded area over the past couple of days. Finding support and now bouncing back higher. Yesterday afternoon, we did get some news out of New Zealand. We did get CPI data coming out better than expected. 4:45PM Eastern US time yesterday. The forecast 0.0. Comes out 0.1 percent on CPI. So, good news there for New Zealand, sending this pushing back higher. Now challenging the blue-shaded area, 0.6770, 0.6785 as what was resistance now is pushing above it to become potential support.
I think as long as we could stay above this blue zone, there’s potential that we see this continue to pressure back up again. A falling USD today also giving a little bit of a boost for this going back up. The current USD index a little bit bearish. Nothing too dramatic. I mean let’s not get excited about this yet, but it is falling towards the 100-period moving average on the USD index, giving a little bit of a headway for this to continue to pressure higher.
Look back to the left-hand side of the chart. The black circle shows that if it gets above the blue zone, there’s a good chance we see it back to the green zone, 0.6830, 0.6850. So, that’s what we’re looking for. We’re looking for clues and evidence that it’s going to go stay above the blue zone. Falling USD. Rising NZD. And that it’s going to continue to pressure back up towards the green zone.
We don’t want to assume that. We want evidence that it’s going to do that. Otherwise, sudden reversal back under the blue zone could see it go back down again. That’s been the M.O. for this currency pair. Rising and falling.
Let’s go ahead and take it on down to the four-hour timeframe. And as we get down here, we’re getting better information, aren’t we? Better information that if it can stay above the blue-shaded area, we might see it continue to pressure back up again. Hey, take a look back here. This is what we’re kind of looking for on this currency pair. Right there, where the black circle is, it got above. Stayed above the blue-shaded area and eventually moving its way right back to the green zone.
So, that’s kind of what we’re looking for today, isn’t it? We want some evidence that it’s going to stay above the blue zone. For me, that’s going to be this current candle or even the next candle. Staying, opening and closing above 0.6785, increasing our confidence that it’s going to continue to pressure back up here. A falling USD. Rising NZD is what’s causing it; what would cause the continued rise towards that green-shaded area.
If we suddenly get a stronger USD and this turns back bearish again underneath this blue-shaded area, of course that would change the picture, wouldn’t it? We’d see it pushing back down. Didn’t do that over here. It never got back under the blue zone until over here. So, if it were to get under the blue zone, that changes our mind and we would probably then expect for it to continue down towards the pink-shaded area. Once again, 0.6735.
Staying above here is the key point for the day today. We need it to stay right above that blue-shaded area like it did back there at the black circle and then that would increase our confidence that we’re looking for the market to continue this bullish move back towards the green-shaded area as the next resistance target for the NZDUSD today.
From Forex Traders Daily, this has been your daily analysis with Ross. If you would like to get Ross’ analysis on all the currency pairs he’s watching and all the trades he takes today, join him in his live Trade Room by clicking on the link below. Please leave any comments you have about today’s video in the comment section below.