For those of you who have been watching NZD/USD, you’ve seen a considerable drop in this pair, and now that it’s broken the previous daily low of 0.6141 we should see a further decline.
Today’s new home sales report was a surprise of 1.23 million new homes, in which the market was expecting a decline. If tomorrow’s report is strong, it will validate the upcoming interest rate hikes expected by the market, and we should see a further drop in this pair. If we see a solid break of the 0.6000 level, it may be bad news for the New Zealand dollar. Here’s a trade idea if this scenario unfolds:
Short NZD/USD 0.6010, stop at 0.6040, pt1 at 0.5980, pt2 0.5950