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NZD/USD Technical Analysis: descending channel breakout confirmed ahead of Fed

The NZD/USD pair crossed the descending channel hurdle yesterday, signaling an end of the pullback from the recent high of 0.6969 and a resumption of the bullish move.

So far, however, the pair has struggled to capitalize on the bullish breakout. As of writing, it is trading at 0.6858, having clocked a high of 0.6880 yesterday.

The Fed will announce its policy decision on Wednesday, at 1900 GMT. Markets seem positioned for a “dovish hike”, where the Fed hikes rates by 25 basis points, as expected, but lowers its rate hike forecasts. As of now, markets are assigning just a 30 percent probability of a single rate rise in 2019.  

The Fed, however, may remove just one rate hike from September's forecast of three 2019 rate hikes, leaving the markets well behind the curve. As a result, the risks surrounding the US dollar are skewed to the upside, meaning the bull breakout seen in the NZD/USD pair could end up trapping the bulls on the wrong side of the market.

4-hour chart

Trend: Cautiously bullish

NZD/USD

Overview:
    Today Last Price: 0.686
    Today Daily change: 12 pips
    Today Daily change %: 0.175%
    Today Daily Open: 0.6848
Trends:
    Previous Daily SMA20: 0.6851
    Previous Daily SMA50: 0.6722
    Previous Daily SMA100: 0.667
    Previous Daily SMA200: 0.6843
Levels:
    Previous Daily High: 0.6881
    Previous Daily Low: 0.6798
    Previous Weekly High: 0.6912
    Previous Weekly Low: 0.6778
    Previous Monthly High: 0.6887
    Previous Monthly Low: 0.6514
    Previous Daily Fibonacci 38.2%: 0.6849
    Previous Daily Fibonacci 61.8%: 0.683
    Previous Daily Pivot Point S1: 0.6804
    Previous Daily Pivot Point S2: 0.6759
    Previous Daily Pivot Point S3: 0.672
    Previous Daily Pivot Point R1: 0.6887
    Previous Daily Pivot Point R2: 0.6925
    Previous Daily Pivot Point R3: 0.697

 

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