Rotational Trading Plan For The NZD/USD

The NZD/USD is trading in a key technical area on the daily timeframe. With the coming release of the Reserve Bank of New Zealand’s (RBNZ) Inflation Expectations report, this market is relatively quiet. Nonetheless, upon the release of the RBNZ report, volatility will be on display.

The industry consensus for the release is for it to remain at a static 2%. Of course, any deviation from expectations is likely to bring traders to the markets in droves. Let’s take a look at the daily technicals and identify a way of attacking the slow market conditions.

NZD/USD Technicals

The fourth quarter of 2017 was a good one for the Kiwi. A pronounced uptrend carried on throughout January, with a corrective phase being entered thus far in February.

For the past week or so, price has consolidated between .7176 and .7350. Currently, trade is firmly between the Daily SMA and Bollinger MP. Here are the key levels for the remainder of the forex session:

• Resistance(1): Daily SMA, .7325
• Support(1): 20 Day EMA, .7269
• Support(2): Bollinger MP, .7262

Bottom Line: With the RBNZ Inflation Projections taking center stage in the U.S. overnight session, the NZD/USD is likely to establish a rotational pattern for the remainder of the forex trading day. A plan to capitalize on slow market conditions is ideal.

Buying in at support (.7270), or selling from resistance (.7325) are solid ways to play the consolidating market. Be sure to look for moderate profit targets in the 10-20 pip range and keep stop losses tight. In the event that the market breaks out ahead of today’s forex close, realizing a small loss is optimal.