Welcome to our newest feature; DecaPip. The concept is simple: our professional market technician, with an exceptional system, showcases his own daily Support and Resistance levels across a broad spectrum of FX currency pairs. The most effective way to use the levels are:
- If indicated levels hold, look for the price to reverse.
- If levels are broken, look for the price to continue past to new highs or lows.
For this Wednesday’s edition of DecaPip Daily I would like to look at the NZDUSD and a potential trade set up before the much anticipated Federal Reserve meeting later today.
This is a very interesting potential trade because we have a divergence in monetary policy between the central banks of both countries occuring.With the RBNZ actively in the process of tapering there interest rates down and the FED potentially about to hike there rates as soon as this meeting or the next.
Fundamentally we could argue that the divergence in policies could reflect the current trading price.For the time being I am happier to look for chances to sell any advances.
Overnight we had a spike higher to sell into for those keen to short any rallies on this pair.Currently resistance 1 sits around the 6722 level for any traders who would like to take a short position before the Federal Reserve announcement with 6650 the current break out level.
From the chart below we get a greater indication of the near levels that NZD traders are watching today with a large drop expected to occur under the break point.
Currently 6711-22 is the level of interest for sellers of NZDUSD with tight stops above.Personally I like to sell the counter trend spikes and this has presented us with an attractive opportunity to position ourselves in the direction of the recent trend with an attractive entry point.
Got any questions about our new DecaPip feature? Contact Nathan at Nathan@littlefishfx.com
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