NZDUSD downside potential ahead
The USD found a bid on Friday after the Consumer Price Index came in a little higher than expected. The background to this is here (link to Friday's article).
We now wait to see what the Fed makes of it all mid-week. The Reserve Bank of New Zealand will also hold a monetary policy review meeting on Thursday morning local time.
Market pricing suggests only a 10% chance of a rate cut and commentary is dovish.
Management and risk description
From an Elliott Wave perspective, I am still interpreting the Kiwi’s advance from its 0.6235 low of last September as a “Double Three” corrective structure (refer daily and weekly charts below).
Entry: Kiwi is seen as a sell at 0.7290/0.7305 today.
Stop: 0.7332, initially.
Target: 50% at .7113 and 50% at .6990.
Time horizon: Allow a few weeks.
NZDUSD daily chart (click to expand)
NZDUSD Weekly chart (click to expand)