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Short-term Trading Idea FX NZD/USD – Wait and See: Will a Double Bottom Kick In or a Break from the Trend

Trading opportunities for currency pair: NZD/USD rate closed at the trend line. 0.7175 and 0.7187 minimums have formed a double bottom. On Monday-Tuesday we will either see a break from the line or a break through the resistance and growth to 0.7726. Whilst the trend line hasn’t yet been broken, it’s better stay in the bull’s dollar camp.

The dollar bull’s mood has changed after the last time the US Fed’s Federal Open Market Committee convened and Janet Hellen’s speech. Further support to the New Zealander came from strong GDP data for the country in the final quarter. The head of the US Fed, J. Hellen, indicated that the central bank is worried by the excessive strengthening of the dollar and so the bank feels forced to delay a tightening of monetary policy.

New Zealand GDP in Q4 grew by 3.5% in relation to the same period in 2013 (forecasted 3.4%). GDP growth in comparison to that of Q3 was 0.8%. The growth assessment of GDP in Q3 was reduced by 0.1% to 0.9%.

On Thursday the US dollar made gains against the majority of other currencies, but on Friday it again came under intense pressure. Traders were closing long dollar positions. Reverse models appeared on the old time frames for the key pairs.

This week I’ve chose the NZD/USD pair. Currently we see that on the daily period there’s a double bottom price model. The price is situated by the trend line, under 0.7608 resistance. A break in the 0.7612 maximum from 26/02/15 will open the road to 0.7726 for the bulls. When it rebounds, the price will return to 0.7360. Monday will be a decisive day for the dollar.

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