LAST WEEK SUMMARY
Last week was indeed a roller coaster week, we saw the FED raised rates, but the market sold off the US Dollar. On the other side, BOE tone were slightly hawkish, with “Kristin Forbes considered it appropriate to increase Bank Rate by 25 basis points”, and “there will be some modest withdrawal of monetary stimulus over the course of the forecast period.” We saw the UK Pound rallied out of this risk event.
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THE WEEK AHEAD
This week, our focus will be mainly on the RBNZ Rate Statement. We are not expecting a change in interest rate this month, but the tone from the statement will provide some forward guidance and thus move the market accordingly.
Based on our Elliott Wave Analysis, we are bearish bias on the Kiwi and will be looking for opportunities to sell the NZD.
On the Daily timeframe, price seems to be forming an expanding diagonal structure, potentially completing around the 0.6689 area. This confluence with the 61.8% retracement of the previous up swing move.
We remain overall bearish on the NZDUSD as far as price has yet to test the minimum target around 0.6689 – 0.6841 area.
On the lower 4-hour timeframe, with the current structure, we are also expecting a move lower towards 0.6689 – 0.6841 area after the correction is completed.
We will be riding on the risk event to give us the catalyst for our trade.
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