(MENAFN- Daily Forex) Potential signal:

• I'm going to use the daily candlestick to determine the direction of the next trade in the NZD/USD pair.
• I would be aiming for 50 pips in either direction, with a stop loss halfway in the middle of the candlestick.
• This is a short-term trade, but in this environment that's probably only

The New Zealand dollar has been all over the place during the trading session on Wednesday, as we are sitting around the 200 Day EMA, which is actually used as support earlier in the session. However, we have bounced a bit since then, as we have had a lot of volatile moves during the day, not only in the NZD/USD pair, but pretty much anything involving the US dollar at all.

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The New York Times decided to print a story that somebody gave them, suggesting that Donald Trump was going to fire Federal Reserve Chairman Jerome Powell, which of course caused absolute chaos in the markets, we started to see a lot of US dollar negativity. However, the market has fallen since then, and at this point in time we are looking at a market that's basically unchanged. We are currently trading between the 50 Day EMA above, and the 200 Day EMA below. If we were to break down below the 200 Day EMA, then I think it opens up the possibility of a drop to the 0.5850 level.

EURUSD Chart by TradingView

On the other hand, if we were to break above the 50 Day EMA, we could go looking to the 0.6033 level, possibly even the 0.6125 level. However, the one thing about this pair that I would keep in the back of my mind is that it certainly looks as if the US dollar is starting to attract a bit of attention, as rates in America are swallowing the rates of every other currency. The PPI numbers came out lower than anticipated, suggesting that there is not a huge knock on effect from tariffs as far as inflation is concerned. This was the day after CPI numbers came out cooler than anticipated as well, so at this point in time I think a lot of traders out there have been caught on the wrong side of a lot of assumptions.

Expect choppy and noisy behavior, but I think the New Zealand dollar is setting up a potential short-term trade. I believe that we can break on one direction or the other from this candlestick during the session, that I think short-term traders will probably get involved.

Ready to trade our daily Forex analysis ? Here's a list of the brokers for forex trading in New Zealand to choose from.

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