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Trade on the Anticipation of US CPI

Market Analysis

NZDUSD, H1

The NZDUSD prices remain below the 50 Day EMA broke yesterday after Dovish comments announced out of RBNZ.  The pair had picked up a bit yesterday, following U.S. data disappointments yesterday, with both initial claims and PPI figures disappointed, the latter of which flags downside risk to CPI data today. Markets’ attention might remain on the escalating rhetoric between the U.S. and North Korea, however the focus is also on the upcoming  CPI data for which the anticipation of it seems to give strength on the greenback.

Hence we see the NZDUSD  as having entered a choppy consolidation phase today, however a shortframe resistance has been noticed in the hourly chart at 0.7293 ,  which is also the 50 period EMA. On the weakness of the US Dollar early in the morning due to the data and the threats between US and N. Korea, pair manage to form an Up fractal , however it turned lower again without managing to break the previous up fractal and the 50 EMA as well. This can be consider as a possible immediate support level for short time trades.

Nevertheless,  NZDUSD, broke below our shorter moving average (i.e. 10-period EMA)earlier , looking to hit soonish the 20 period MA in the hourly chart. The short-term RSI is at 47 sloping even lower, while MACD looks that is likely to turn negative. Therefore a SHORT position as taken in this timeframe , with entry at 0.7282  and targets at  0.7270  and  0.7263  based on ATR.

As mentioned, the market will look ahead to U.S. CPI data later on which expected at a 0.1% m/m contraction but 0.1% y/y expansion.

Additionally, as per the link : https://analysis.hotforex.com/nzdusd-into-the-rbnz-meeting-on-thursday

On Tuesday I took 2 positions in NZDUSD, an hourly  LONG position and a Daily SHORT position. The H1 position hit SL and therefore I had a loss of -35 pips. Meanwhile The Daily SHORT position hit target at 0.7305,  by giving  +60 pips  gain. Hence Net Gain is just at  +25pips. 

However Another SHORT entry was taken in the Daily chart, at 0.7282  and Targets at 0.7220  and  0.7150  (i.e at 200 Day EMA). Support was set at 0.7430).

 

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Andria Pichidi

Market Analyst

HotForex

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