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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

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.