Friday’s U.S. dollar weakness pulled NZD/USD to a hot trend retracement area!
Think the bears will step in at current levels? Or will bulls sustain their momentum and aim for higher areas of interest?
Here’s what we’re seeing on the 4-hour time frame:
NZD/USD 4-hour Forex Chart by TradingView
Powell’s dovish Jackson Hole speech dragged the U.S. dollar lower against most of its counterparts on Friday.
But traders aren’t likely to forget that at least two Reserve Bank of New Zealand (RBNZ) members voted for a sharper interest rate cut in August.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the New Zealand and the U.S. dollars, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
NZD/USD has been trading in a downtrend since July, sliding all the way to .5800 before Friday’s USD weakness gave it a 50-pip lift.
The pair is now hanging around .5860, which lines up with the Pivot Point at .5868, the 38.2% retracement of August’s downswing, and the middle of the channel on the chart.
If NZD/USD continues to draw in sellers and more red candlesticks show up, the pair could head right back to the .5800 lows or even print fresh August lows.
On the flip side, a run of green candles and steady trading above this mid-channel area would open the door for a move toward the R1 Pivot near .5935 or even the .5950 level at the top of the channel.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
