For the past few days, I’ve been eyeing the key weekly level on several major pairs. This breach is expected to further propel the sell-off of the U.S. Dollar since strong employment figures are already expected, but the probability of another rate hike is reduced drastically.
Prior to the weekend close, NZDUSD remains one of the few pairs to have stalled and retraced as seen with the EURUSD and AUDUSD pairs. Taking advantage of this and the positive swap rates, I took a long position prior to Friday’s 5 pm close.
My stop loss is kept just below on of the key shorter term hourly levels. The last two hours before the close did not result in this pair getting sold off much at all.
However, the daily chart does provide a key point of concern. My two previous daily resistance lines were plotted at the 0.734~ and 0.738~ price levels. Once price has broken through both levels, I noticed an additional level to which the price seems to be stalling now. The 0.745~ price level will have to be the final level this pair would have to breach, which I see it as highly likely.
Aside from Tuesday’s consumer confidence release, the first half of next week will not be very fundamentally driven. This will give us a chance to observe the strength of the weekly resistance level breach.