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NZD-USD Fundamentally Bearish

nzd-usd, nzdusd, nzd usd, US dollar, new zealand dollar

nzd-usd, nzdusd, nzd usd, US dollar, new zealand dollarToday I will analyse the pair NZD-USD. After the Federal Reserve meeting, the USD strengthened even because if investors before were sceptical about the third raising of interest rates this year, the game is still open now, and everything will depend on the next macroeconomic data.

I start from the premise that there will be a lot of volatility over the next three months in the currency market, however, let's try to assess how to take advantage of the situation.

The currency pair that, for various reasons, has most affected my interest is NZD-USD. Comparing the two economies, the US remains stronger. New Zealand is trying to get out by a stagnation period and starting a growth phase but is still too weak. The currency pair was back on yesterday above the fundamental resistance at 0.73400 (last cut of the interest rate by RBNZ) but after the Fed meeting it came back well below (as you can see in the chart below).

nzd-usd, nzdusd, nzd usd, us dollar, new zealand dollar

 

Besides, the Governor of the Reserve Bank of New Zealand during the August meeting stressed that “the exchange rate remains higher than is sustainable for balanced growth in the economy and continues to dampen import prices and tradables inflation”.

For all these reasons, a short entry on NZD-USD is plausible with a first entry in the 0.7340-0.7320 area and a second one (larger size) if the currency pair were to reverse and returning above the 0.73400 level, at 0.74500. Stop loss on both orders at 0.76000. Size of positions to open based on your money management (position size).

If you are interested, you can find in Forex market other articles and analyses, and all the last Central Banks reports. If you want to learn more about the Fundamental Analysis in Forex, read my e-Book.

 

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