By FXEmpire.com
The NZD/USD pair attempted to rally during the Tuesday session, only to fall and form a shooting star. This of course is a very bearish signal considering that it happened at the 0.81 handle, and as such it looks like we may fall back down to the 0.80 level to look for support. We think that at that area there should be a reasonable attempt to support the pair.
However, it should be kept in mind that the Federal Reserve meets later today and the jobs number comes out on Friday. Not to mention the fact that there is an ECB meeting on Thursday, there is plenty that could move the Kiwi dollar. This will all be based upon interest rate expectations, and if the Fed it does very little, it could push this pair back down. Overall, we think that we are in consolidation between the 0.81 and 0.78, and will trade this pair like that in till we break out to the upside or down to the downside.
Commodity markets will have to be watched, but it should be noted that several of them fell during the session on Tuesday as traders prepared for the central bank onslaught that is coming. The fact that we close the day with a perfect shooting star does make this pair look especially vulnerable at this moment in time, and as such we would not be comfortable being long at this point in time.
Overall, the pair does look relatively bullish but a pullback certainly wouldn’t be out of the question. The truth of course will come out within a few weeks as the larger traders come back to the trading floors around the world. Once we get into September, there’s a very good chance that the tone for the next 3 to 6 months will be set. You can bet that the Kiwi dollar will be very reactive to the risk appetite around the world, and as such this is going to be interesting trade for the next several weeks. Again, we are buying on a break out of the upper part of this consolidation area which we have represented by the top of the shooting star for the Tuesday session, and of course selling the break of that candle as well to the downside.
Click here to read NZD/USD Technical Analysis.
Originally posted here
