NZD/USD (SHORT) - Technical and Fundamental Anaylsis
I will be looking to enter a short trade in the area depicted by the purple box. From a technical perspective, we can see that should price return to this level it will face overhead resistance from the third touch of the trend line. Furthermore, we have the added confluence of the 50 EMA aligning almost perfectly with the trend line, as well as the fact the MACD is showing no signals of a shift in the downward momentum.
Looking at the higher time frames, we can see that NZD/USD was already in a downtrend and this has now been worsened by the outbreak Covoid-19. It is expected the virus will have a significant impact on the global economy due to the supply chain disruption caused by the closure of Chinese factories, and the past couple of days have shown us that the US economy and therefore the dollar are not immune to this. However, the New Zealand Economy is far more exposed that its US counterpart and therefore more at risk to a downturn. I am therefore shorting NZD on the basis that the fundamental negatives are worse for its economy than for those of the USD.
The first target will be the 0.624 area
Looking at the higher time frames, we can see that NZD/USD was already in a downtrend and this has now been worsened by the outbreak Covoid-19. It is expected the virus will have a significant impact on the global economy due to the supply chain disruption caused by the closure of Chinese factories, and the past couple of days have shown us that the US economy and therefore the dollar are not immune to this. However, the New Zealand Economy is far more exposed that its US counterpart and therefore more at risk to a downturn. I am therefore shorting NZD on the basis that the fundamental negatives are worse for its economy than for those of the USD.
The first target will be the 0.624 area
Comment:
I will be following this trade down the trend line and still looking to enter if price pulls back