The New Zealand dollar had a rough go through April, but seems to be kicking off May on the right foot! For you Kiwi bears out there, here are a couple of pullback setups if you still believe NZD weakness is ahead.
Since mid-April, NZD/CHF took a wicked dive of roughly 3.75%, going from around .7050 to .6800 in just a couple of weeks. Fortunately for the bulls, they’re getting a little bit of relief to start off the new month with this fresh bounce higher on likely profit taking. Question now is whether or not this is another chance to short or is it a certified reversal?
Well, the bears might wanna wait a bit before laying out them shorts with the market still in strong rally mode. And also because it’s not quite reached the Fibonacci retracement area, which also happens to line up with the broken swing low and falling 100 and 200 simple moving averages, all of which combined makes for a great resistance area argument. Of course, if it blasts above that area between .6900 – .6950, then get them buy orders ready because the bulls may come back!
The technical setup on GBP/NZD is pretty much like the one on NZD/CHF above except flipped upside down. The pair has been on a heck of a move since the end of April, rallying around 3.80% or around 700 pips in the last week alone! And with a mostly empty calendar today from Europe, this pullback could be a profit taking move, which gives it less of a chance of being a full reversal without a major catalyst.
With the market already testing the 100 day simple moving average, we could see the bulls start stepping in soon, but the market could go as low as around the major psychological handle of 1.8500 where we see the 61% and 200 simple moving average line up.
For the bears, that same area could be the launch point for a full move lower, so just be ready to bail or even switch trading bias if the pair breaks past 1.8440 on strong momentum, a’ight? And as usual, just remember to always practice proper risk management.
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