NZD/USD Signal 17/09: Reaches For Major Resistance (Chart)

(MENAFN- Daily Forex) Potential signal:

• At the end of New York trading, if the New Zealand dollar is above the 0.60 level, I'm a buyer with a stop loss at 0.5933.
• I am looking forward to a move to the 0.6150 level.

The New Zealand dollar initially fell on Tuesday, only to turn around and show signs of life again. At this point in time, it looks like the New Zealand dollar is reaching toward a major resistance barrier in the form of the 0.60 level, an area that is a large, round, psychologically significant figure. If we can break above that level, it would obviously be a very big deal, but as things stand right now, I think you've got a situation where markets don't really know what to do as we head into major news.

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Keep in mind that the FOMC Meeting coming out of the Federal Reserve will give us a new interest rate decision at the end of the day on Wednesday, and perhaps more importantly, a statement and press conference. Traders will be glued to their terminals to try to sort out what the Federal Reserve is going to be doing going forward, and where we may be going with interest rates. After all, if interest rates start to take a major dive lower, then it could have a massive detrimental effect on the US dollar itself. On the other hand, if they sound like they are at least“data dependent”, that could have people a little bit more concerned about whether or not they will loosen quickly enough to make everybody happy.

EURUSD Chart by TradingView

I think at this point in time you have a market where you will have to watch the 0.60 level for clues, and I would prefer to see a break above there after the interest rate decision and the statement, and of course the press conference. If we get all of that and the New Zealand dollar is above the 0.60 level, then it would suggest that perhaps something has been confirmed, and that the US dollar will continue to fall. Retail traders will continue to fall for the idea that the fact that the Federal Reserve is cutting rates means that the US dollar has to fall, but the market already knows what's going on, so to think that it will simply dump US dollars is a bit of a stretch without some type of confirmation.

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