NZD/USD pair remains within a long term range but has broken a significant resistance post Yellen speech and dovish dollar signal. The recent price action has also been slightly bullish across the broad for dollar pairs, as previous resistance at 0.6725 has been broken and price has been able to hold above this level.No major news hitting the wire today as far as Kiwi is concerned. Regarding the USD, there are some minor news flow but not material to disrupt trading idea.
Despite dovish tone RBNZ to keep NZD down to boost exports and the recent surprise rate cut, Kiwi remains the the preferred carry trade among traders. Positive housing starts report at the start of Asia-Pacific trading also helped the cause.The USD index, declined after Yellen was dovish about hiking interest rates in her first comments since the Fed decided this month to keep interest rates on hold. She repeated that it was appropriate to “proceed cautiously” in raising rates, saying the inflation outlook had become more “uncertain”.
NZD/USD Trading idea Buy NZD/USD if it breaks 0.6715 level and test 0.6700 level successfully. Daily close above 0.6715 will confirm the trade and it can be hold for overnight. Stop loss 5 pips below the local swing low. You may book 50% profit once trade moves 30 pips into the green. Trailing stop loss of 25 pips is recommended once partial profit is booked. Keep an eye on any global geopolitical news while the trade is in progress to avoid volatility. In the event of major news flow,cancel this forex signal.