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Short-term Trading Idea: FX NZDUSD – Bull Speculation: Expect a Retreat From Downward Formation Upwards

Trading opportunities for currency pair: the dollar bulls are worried about a slowing of the US economy if the US Fed doesn’t raise rates in June. The key pairs have seen a deep correction. If after the FOMC has convened the dollar can’t get back its losses, expect a NZD/USD growth to 0.7824 and 0.8015.

The last time I did an idea on this currency pair was on 23rd March of this year. Back then a double bottom was forming and the price was right by the trend line. After a break in the trend line I expected a strengthening of the New Zealand dollar to 0.7726.

In fact, the line was broken on 23rd March. After the break the NZD/USD rate grew to 0.7695. The bulls didn’t manage to realize the potential of the reversal pattern. The pair was thrown back to 0.7390. As a result, the forming of a downward triangle was started. If we look at the waves from its peak of 0.7612 then it’s already formed and is worth expecting it to leave and head up to 0.81.

The triangle isn’t yet completed. In the waves there are some deviations. For example, between the peaks 0.7695 and 0.7739 we can consider a W formed pattern (indicating a decline) which shouldn’t be there. To cancel the triangle, it’s worth making a blow-out until 0.7890. In this case, the probability for growth will be cancelled out.

The FOMC will convene on 29th and on 30th April the RBNZ will convene. It’s expected that the central bank will leave the rate 3.5%. The dollar bulls are worried about a slowing of the US economy if the US Fed doesn’t raise rates in June. The rates of the euro/dollar and pound/dollar have broken their daily trend lines. Due to this I’m counting on seeing a break in the resistance of 0.7712 with a corresponding growth to 0.7824 and 0.8015.

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Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

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