This dollar pair still seems to be making up its mind about going for a double top neckline break.
Is a bounce about to follow instead?
NZD/USD Trade Idea
I’ve had this long-term reversal pattern on my radar a while back, but I think it’s worth looking at again to see if a big move is still possible.
NZD/USD seems to be making another attempt to break below the neckline support at the .7000 major psychological mark, and we’ve got a big catalyst in the form of the NFP release coming up.
Can this top-tier event spur a break lower? Will it be time to sell NZD/USD?
Analysts are counting on a much stronger pickup in hiring for June compared to the previous two months, so this might be enough to boost the Greenback.Keep in mind that the FOMC said that they’d like to see more employment gains before making any policy adjustments, so this jobs release might be a pretty huge deal.
Of course, things could go either way, as a downside surprise could dash hopes of the Fed tapering anytime soon. If that’s the case, risk appetite could also pick up as low borrowing costs would be kept in place, lifting the higher-yielding Kiwi.
Don’t forget that RBNZ Governor Orr recently pointed out that the New Zealand economy is returning to pre-pandemic levels, which might mean that the central bank is ready to scale back its stimulus efforts.
If the floor at the .7000 mark keeps holding, NZD/USD might recover to the highs around .7300 to .7400.Stochastic is suggesting that buyers have the upper hand, as the oscillator has just started climbing out of the oversold region.
I’ll hold out for the NFP report before hopping in, and I’ll be using this handy NZD/USD volatility guide for my entries and exits.
Do you plan on trading the NFP, too?
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