By FXEmpire.com
The NZD/USD pair initially rose during the session on Wednesday, but after the Federal Reserve meeting ended and the statement was released it turned around and failed to form a shooting star. This is because the statement failed to suggest any type of additional easing, which may have been already priced into the markets.
The candlestick comes after a very similar candlestick on Tuesday, and as such we feel that this market is ready to fall. We do of course see plenty of support at the 0.80 level, and unless there’s some kind of major shock to the system – which of course could come out of the ECB, we think that this market should hold above that level by the time it’s all said and done.
The markets seem remarkably resilient at the concept of talking themselves into thinking that there will be more stimuli coming, and there’s nothing to suggest that this won’t happen again. There already rumors on the Internet about easing coming out of the Federal Reserve in September, so one has to wonder how long any fall from this area could last regardless.
However, we do see the short-term trade set up available, and thought we would comment on it. Dollar daily forecastreally will come down to what the ECB says, and of course the nonfarm payroll number coming of the United States on Friday. Both of these economic events will play major roles in the upcoming move in and all risk related assets, and judging by the recent reactions we think that eventually we could see a significant move lower. However, it seems that hope springs eternal so we will have to be very cautious shorting any of the higher flying currencies.
Again, this is short-term analysis, and as such we think that stop losses should be kept handy in case of a bounce after this initial plunge lower. Of course, you never know when the markets will fall hard, so this of course gives you the exposure that would be needed.
Click here to read NZD/USD Technical Analysis.
Originally posted here
