NZDUSD - 0.72 Resistance Test for H&S Pattern
Looks like H&S forming on the daily ( as per yellow arrows ) but needs to break current resistance and TL @ 0.72 level (reference graph in comments section). If it does break this resistance then the road is clear for 0.73 again.
Before anyone gets excited - wait for the dust to settle from NZ inflation data from today and wait for US open first. On first impression - NZD went up from bad data, however market reacted to less than expected quarter to quarter inflation segment more and higher than expected tradable inflation. Perhaps another surprise directional move to news release like last RBNZ announcement.
That being said, likely to see a bounce around 0.72 level and wait for a retest - if that level does not hold then this idea is more likely to happen.
Until then - risk will still be to the up side despite almost certain RBNZ rate cut in next announcement - may start seeing market pricing this in in the coming weeks however the motives of rate cut are still RBNZ inflation target based so market may react unexpectedly pending other data releases.
I hold the view that likely to see sub 0.68 by year end
Before anyone gets excited - wait for the dust to settle from NZ inflation data from today and wait for US open first. On first impression - NZD went up from bad data, however market reacted to less than expected quarter to quarter inflation segment more and higher than expected tradable inflation. Perhaps another surprise directional move to news release like last RBNZ announcement.
That being said, likely to see a bounce around 0.72 level and wait for a retest - if that level does not hold then this idea is more likely to happen.
Until then - risk will still be to the up side despite almost certain RBNZ rate cut in next announcement - may start seeing market pricing this in in the coming weeks however the motives of rate cut are still RBNZ inflation target based so market may react unexpectedly pending other data releases.
I hold the view that likely to see sub 0.68 by year end
