WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Today’s Trading Edge: NZD/USD –Kiwi slumps after report shows Chinese imports decline

Posted by Edward Moya on Dec 7, 2014 11:14:00 PM

 

The WWM NZDUSD DEC 7 2014New Zealand dollar fell to a new 2 ½ year low after a report showed that both Chinese exports and imports for the month of November came in lower than expected.  While the overall difference provided a record high for the surplus reading which came in at $54.5 billion, the reaction was bearish for the commodity currencies as imports fell -6.7% y/y. 

Price initially gapped lower to start the trading week and is tentatively breaking away.  After the 9:07 PM EST Chinese release price broke below the .7670 support level and made a key low at .7640.  With price continuing to make fresh lows the bearish trend appears firmly in place. 

The NZD/USD daily chart displays the recent downward pressure that is currently trending below the 200-, 100-, and 50-day Simple Moving Averages.  If the decline remains strong and continuous, price could target the .7550 level and form a bullish butterfly pattern.  It is around that area that we may see a limited bounce higher.   If we see a daily close below .7500, further downside may target .7250. 

Major resistance will come from the bearish trendline that started from the November 17th high.  A close above that level may open the door for further consolidation.     

The trade: Sell NZDUSD at .7650 with a stop loss at .7700 and a take profit at .7550.  The Risk/Reward Ratio is around 1:2.

Edward J. Moya

Technical Strategist

WorldWideMarkets Online Trading

Topics: New Zealand Dollars, New Zealand Dollar nzd/usd, New Zealand dollar, NZDUSD, net position, New Zealand Economy

 

Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

FAQ CenterLEARN MORE >>
Browse our frequently asked questions and find your answers right away.

VideosLEARN MORE >>
Access to the educational lessons, webinars and platform walkthroughs.

READY TO TRY THE MARKETS?

Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!