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Forex technical analysis: NZDUSD to react to RBNZ and Gov. Wheeler testimony

Twice a year Financial Stability Report to be released at 5 PM ET/2100 GMT

The RBNZ Financial Stability Report will be released at 5 PM ET/2100 GMT followed by Governor Wheeler's press conference which is expected to start shortly thereafter. He will then testify at 9:10 PM ET/2310 GMT (don't hold me to the times. Eamonn will keep you abreast).

With the RBA cutting rates at there last meeting, speculation is the RBNZ will follow suit. The pair has moving down in solidarity with the AUDUSD fall after their cut. The price has moved from a double top at the 0.7053 level and today touched the 100 day MA for the first time since March 16th. The 100 day MA is at 0.6721 today. The low touched 0.67155 today (5-6 pips below the MA level). We will call that a test and bounce. The pair is trading at 0.6758. That level will be a key level in trading through the headline and presser.

I normally would suggest the break below the 100 day MA would be a key line in the sand, but the line today is really a bit wider than a single price. That is because the 50% of the 2016 range is not far away at 0.66997 (let's call it 0.6700). So the "line in the sand" is a bit wider at 0.6700-0.6721. On more dovish comments (and assuming they are not already discounted), a break of that level should open the door toward the swing low from March 28 at 0.6660 and then the 200 day MA at 0.66375. Reaching that extreme is in the certainly in the cards.

If the report/Wheeler does not hint of a cut soon, a move back above the broken trend line on the daily chart the 0.6800 level, will be bullish step #1. That level also corresponds with the low from US employment day and the low from April 27th. So key level. A mov eaobve that will next target the 100 hour MA at 0.6827 (blue line in the chart below) and the 0.68443 (38.2% of the move down from last weeks high). Trend line resistance at 0.6866 and the 50% retracement at 0.6884 complete the upside targets for the pair.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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