NZD/USD: Respect the range until the Kiwi doesn’t

Some FX pairs like to gravitate towards big figures but not the NZD/USD. It’s clearly a fan of doing things in half big figure increment, proving plenty of opportunities to build trades around.

NZD/USD has been sandwiched in a 100 pip range in February
Despite the narrow range, momentum is building towards the upside

Some FX pairs like to gravitate towards big figures but not the NZD/USD. It’s clearly a fan of doing things in half big figure increments, as seen in the daily chart below.

Since late January, and despite a whole raft of domestic and international risk events in between, NZD/USD has been sandwiched between .6050 and .6150 throughout, respecting the range like clockwork whenever visited. Given the quirky price action and proximity to resistance at .6150, it presents an opportunity for traders to build a trade around.

Kiwi Fdeb 20

NZD/USD may retest .6150 again soon despite another failure

Right now, the price action over the past 24 hours suggests another failure at .6150, allowing traders to go short with a stop above the level targeting a reversal down to .6050, where it bounced a couple of times earlier this month. The risk-reward is decent, especially given recent form.

However, with MACD and RSI trending higher, it wouldn’t surprise to see another retest of .6150 given momentum is to the upside. If that eventuates, it will allow for trades to be established depending on whether we see another rejection or topside break.

If the price falters again at .6150, you could sell below the level with a stop above targeting .6050. However, if we see a clean topside break, a retest of .6250 – where NZD/USD was rejected on eight separate occasions in January – could be on the cards should the 50-day moving average give way.

With known event risk largely absent this week, this is a potential trade idea to keep on the radar in the days ahead.

-- Written by David Scutt

Follow David on Twitter @scutty

How to trade with City Index

You can trade with City Index by following these four easy steps:

Open an account, or log in if you’re already a customer

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Search for the market you want to trade in our award-winning platform
Choose your position and size, and your stop and limit levels
Place the trade

Latest market news

Weekly equities forecast: Amazon, Apple & HSBC earnings previews

Today 06:37 AM

S&P 500 Analysis: SPX rises after more tech earnings & despite sticky inflation

Yesterday 01:25 PM

USD/JPY analysis: BoJ disappoints as focus turns to intervention and US data - Forex Friday

Yesterday 11:40 AM

DJIA, S&P 500, Nasdaq 100 Forecast: US Indices Vulnerable Through Earnings Season

April 25, 2024 03:09 PM

DAX analysis: Stocks hit by stagflation concerns amid earnings bonanza

April 25, 2024 03:00 PM

Dow Jones Analysis: DJIA falls after Meta disappoints, inflation rises

April 25, 2024 01:12 PM

Open an account today

Experience award-winning platforms with fast and secure execution.

Open account

Web Trader platform

Our sophisticated web-based platform is packed with features.

Learn more

Latest NZD USD articles

NZD/USD pops as RBNZ rate cuts bets delivered sticky reality check

By:

David Scutt

April 16, 2024 11:23 PM

NZD/USD: Inflation the only barrier between the RBNZ and rate cuts

By:

David Scutt

April 16, 2024 06:11 AM

NZD/USD, NZD/JPY: RBNZ not wilting on inflation focus despite double dip recession

By:

David Scutt

April 10, 2024 03:19 AM

AUD/USD, NZD/USD, ASX 200 rise ahead of RBNZ, US inflation: Asian Open

By:

Matt Simpson

April 9, 2024 11:02 PM

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.